Automatic Data Processing, Inc. (ADP) – What Are Analysts Saying About This Stock?

Automatic Data Processing, Inc. (NASDAQ:ADP) has earned a consensus rating of “Hold” from the fourteen brokerages that are currently covering the firm, Marketbeat.com reports. Two research analysts have rated the stock with a sell recommendation, nine have assigned a hold recommendation and three have given a buy recommendation to the company. The average twelve-month price objective among analysts that have covered the stock in the last year is $283.27.

A number of brokerages have recently issued reports on ADP. BMO Capital Markets increased their target price on Automatic Data Processing from $248.00 to $305.00 and gave the stock a “market perform” rating in a report on Wednesday, July 29th. Citigroup boosted their price target on Automatic Data Processing from $287.00 to $295.00 and gave the company a “neutral” rating in a research note on Thursday. Royal Bank Of Canada reiterated a “sector perform” rating and issued a $290.00 price target on shares of Automatic Data Processing in a research report on Thursday. Wells Fargo & Company increased their price objective on Automatic Data Processing from $248.00 to $283.00 and gave the stock an “equal weight” rating in a research note on Thursday, July 30th. Finally, Morgan Stanley lifted their price objective on Automatic Data Processing from $286.00 to $288.00 and gave the company an “equal weight” rating in a report on Thursday.

Insider Activity

In other Automatic Data Processing news, VP David Kwon sold 798 shares of the business’s stock in a transaction dated Thursday, August 20th. The shares were sold at an average price of $280.00, for a total value of $223,440.00. Following the transaction, the vice president directly owned 13,193 shares in the company, valued at $3,694,040. The trade was a 5.70% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Maria Black sold 29,810 shares of the company’s stock in a transaction dated Wednesday, September 2nd. The stock was sold at an average price of $280.91, for a total transaction of $8,373,927.10. Following the sale, the chief executive officer directly owned 80,624 shares in the company, valued at $22,648,087.84. This represents a 26.99% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 31,359 shares of company stock worth $8,809,422. Company insiders own 0.15% of the company’s stock.

Institutional Trading of Automatic Data Processing

Several hedge funds have recently modified their holdings of the company. Pathway Financial Advisers LLC acquired a new position in shares of Automatic Data Processing during the 3rd quarter worth approximately $39,000. Chicago Partners Investment Group LLC raised its stake in Automatic Data Processing by 15.1% in the 3rd quarter. Chicago Partners Investment Group LLC now owns 9,480 shares of the business services provider’s stock valued at $2,883,000 after acquiring an additional 1,243 shares during the period. Covestor Ltd lifted its holdings in Automatic Data Processing by 16.5% during the 3rd quarter. Covestor Ltd now owns 538 shares of the business services provider’s stock valued at $139,000 after purchasing an additional 76 shares during the last quarter. Richardson Financial Services Inc. lifted its holdings in Automatic Data Processing by 82.7% during the 3rd quarter. Richardson Financial Services Inc. now owns 709 shares of the business services provider’s stock valued at $183,000 after purchasing an additional 321 shares during the last quarter. Finally, Ascent Group LLC lifted its holdings in Automatic Data Processing by 19.9% during the 3rd quarter. Ascent Group LLC now owns 19,301 shares of the business services provider’s stock valued at $4,981,000 after purchasing an additional 3,200 shares during the last quarter. Institutional investors and hedge funds own 80.03% of the company’s stock.

Automatic Data Processing Stock Up 2.7%

Shares of ADP opened at $293.84 on Friday. The stock has a market cap of $116.43 billion, a price-to-earnings ratio of 26.05, a P/E/G ratio of 2.65 and a beta of 0.83. The company has a quick ratio of 1.05, a current ratio of 1.03 and a debt-to-equity ratio of 0.98. Automatic Data Processing has a 12 month low of $188.16 and a 12 month high of $309.40. The company has a 50-day moving average price of $277.25 and a two-hundred day moving average price of $240.83.

Automatic Data Processing (NASDAQ:ADP) last released its quarterly earnings data on Wednesday, October 28th. The business services provider reported $2.82 earnings per share for the quarter, beating analysts’ consensus estimates of $2.77 by $0.05. Automatic Data Processing had a return on equity of 77.01% and a net margin of 20.33%. The company had revenue of $5.49 billion for the quarter, compared to the consensus estimate of $5.48 billion. During the same period in the previous year, the business earned $2.49 earnings per share. The company’s quarterly revenue was up 6.1% on a year-over-year basis. Equities analysts predict that Automatic Data Processing will post 12.36 EPS for the current fiscal year.

Automatic Data Processing Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Investors of record on Friday, September 11th were given a dividend of $1.70 per share. The ex-dividend date was Friday, September 11th. This represents a $6.80 dividend on an annualized basis and a dividend yield of 2.3%. Automatic Data Processing’s dividend payout ratio (DPR) is 60.28%.

Key Stories Impacting Automatic Data Processing

Here are the key news stories impacting Automatic Data Processing this week:

• Positive Sentiment: Raised fiscal 2027 outlook: ADP now forecasts 10%–12% growth in adjusted earnings per share and raised its outlook for client-funds interest revenue to $1.59 billion–$1.61 billion. The improved guidance is the clearest near-term catalyst for the stock. ADP forecasts fiscal 2027 adjusted EPS growth
• Positive Sentiment: Quarterly results exceeded expectations: ADP reported earnings of $2.82 per share versus the $2.77 consensus estimate, while revenue of $5.49 billion modestly topped forecasts and increased 6.1% year over year. Management also highlighted AI momentum during the earnings call. ADP fiscal 2027 first-quarter results
• Positive Sentiment: Some analysts see additional upside: Guggenheim reaffirmed a Buy rating with a $340 price target, while Stifel raised its target to $305. Jefferies also lifted its target, although it retained an Underperform rating. Guggenheim ADP rating
• Neutral Sentiment: Expansion in small-business payroll: ADP is broadening its reach among small-business customers, a move that could support long-term client and revenue growth but may require additional investment. ADP small-business payroll expansion
• Negative Sentiment: Valuation and analyst caution: Citi, Morgan Stanley, and RBC maintain neutral or equivalent ratings with targets around $288–$295, while Jefferies remains bearish. A Seeking Alpha analysis also argues that investors should not chase the rally despite ADP’s attractive dividend-growth record. ADP dividend growth and valuation analysis

Automatic Data Processing Company Profile

Automatic Data Processing, Inc (NASDAQ: ADP) is a global provider of human capital management and business outsourcing solutions. The company helps employers manage payroll, human resources, workforce administration, benefits, tax compliance, time and attendance, talent management, and related employment processes.

ADP offers cloud-based platforms and services designed for businesses of various sizes, from small enterprises to large organizations. Its portfolio includes payroll processing, human resources management, employee benefits administration, retirement services, workforce management, data analytics, and professional employer organization services through ADP TotalSource.

Founded in 1949, ADP serves businesses in the United States and international markets.