ADP Hit by New ART Rejection, Uncertainty Mounts According to Jefferies
ADP shares fell sharply (-3.76%, to 112.70 euros), as expected, after announcing the latest refusal by the French Transport Regulatory Authority (ART) to approve Aéroports de Paris' airport fee rates for the period from April 1, 2026 to March 31, 2027.
The group explained that, as a result, the rates in effect since April 1, 2025 will remain applicable for the tariff period beginning April 1, 2026, with the exception of the fee for assistance to disabled persons and persons with reduced mobility, whose 15% increase was validated by the ART in its decision of December 16 last year.
As a reminder, on December 17 last year, ART had already refused to approve the rates, causing ADP shares to plunge 12.27% during the December 18 trading session.
According to analysts at Jefferies, the impact on 2026 is negligible, as the rejection simply results in the extension of the 2025 rates. However, the repeated refusals by the regulator further heighten the uncertainty weighing on ADP shares, notes the American investment bank.
Jefferies points out that ART continues to challenge the WACC (weighted average cost of capital, with ART 50 basis points lower), the cost allocation, and the forecasting assumptions, which, according to the regulator, lead to an underestimation of ROCE (return on capital employed) by around 100 basis points.
Jefferies' recommendation on ADP stock remains to hold, with a price target of 122 euros.
Aéroports de Paris develops and manages airports, including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget. In 2024, the Group handled more than 103 million passengers at Paris-CDG, Paris-Orly and Paris-Le Bourget, and c. 261 million passengers abroad. Boasting an exceptional geographic location and a major catchment area, Aéroports de Paris is pursuing its strategy of adapting and modernizing its terminal facilities, upgrading quality of services and developing retail and real estate businesses. Sales break down by activity as follows:
- supply of airport services (33.3%): air traffic management, intermodal transport and terminal management, installation of airport infrastructure, passenger check-in and transfer, baggage handling, aircraft handling (cleaning, guidance, assistance with positioning and start-up, loading and unloading of aircraft), etc.;
- operating sales areas and services (27.9%): shops, restaurants, banks, exchange offices, etc.;
- real estate management (4.7%): land and commercial real estate property leasing (businesses, offices, hotels, logistics buildings, etc.);
- other (34.1%): including international airport management, airport engineering services, specialized telecommunications services, etc.
This super rating is the result of a weighted average of the rankings based on the following ratings: Global Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Investor
Investor
This super composite rating is the result of a weighted average of the rankings based on the following ratings: Fundamentals (Composite), Global Valuation (Composite), EPS Revisions (1 year), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Global
Global
This composite rating is the result of an average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), Financial Estimates Revisions (Composite), Consensus (Composite), and Visibility (Composite). The company must be covered by at least 4 of these 5 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
Quality
Quality
This composite rating is the result of an average of the rankings based on the following ratings: Capital Efficiency (Composite), Quality of Financial Reporting (Composite), and Financial Health (Composite). The company must be covered by at least 2 of these 3 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
ESG MSCI
ESG MSCI
The MSCI ESG score assesses a company’s environmental, social, and governance practices relative to its industry peers. Companies are rated from CCC (laggard) to AAA (leader). This rating helps investors incorporate sustainability risks and opportunities into their investment decisions.