Analysts Cool on Utilities, Warm Up to Payroll Giants

Wall Street slashed target prices on a broad sweep of US utility stocks this week. More than eight major names took cuts. WEC Energy, Duke Energy, Entergy, and American Electric Power all saw consensus targets trimmed. The moves were modest in size but uniform in direction — a sector-wide reassessment.

Entergy drew particular attention. The stock carries 17 Sell ratings against just 1 Buy. Its target dropped from $122.24 to $121.95. Analysts see limited upside despite defensive appeal.

Sempra faces the most lopsided view. It has 14 Sells and zero Buys. The target sits at $103.50. That consensus reflects deep skepticism about near-term returns.

Against that backdrop, payroll processors moved the other way. Automatic Data Processing and Paychex both received upward target revisions. ADP's average target rose to $246.80. It carries a $92.7 billion market cap. The upgrades suggest analysts see resilient demand for workforce management services despite a slowing hiring environment.

The divide is stark. Utilities face pressure from high bond yields and stretched valuations. Payroll processors benefit from sticky recurring revenue. Analysts appear to be rotating sentiment accordingly.