Automatic Data Processing (NASDAQ:ADP) Stock Gets Price Target Boost from Jefferies Financial Group

Key Points

• Jefferies raised its ADP price target from $225 to $250 but maintained an “underperform” rating, implying 12.39% downside from the prior close.
• Analyst sentiment remains mixed: ADP has an average “hold” rating and a consensus price target of $280.64, with three buy, eight hold, and two sell ratings.
• ADP shares fell 2.6% to $285.37 despite quarterly results that exceeded expectations, including earnings of $2.82 per share and revenue of $5.49 billion, up 6.1% year over year.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) had its price target increased by equities researchers at Jefferies Financial Group from $225.00 to $250.00 in a research note issued on Wednesday, Benzinga reports. The brokerage presently has an "underperform" rating on the business services provider's stock. Jefferies Financial Group's price target would indicate a potential downside of 12.39% from the company's previous close.

Several other equities analysts have also recently commented on ADP. Cantor Fitzgerald boosted their price objective on shares of Automatic Data Processing from $295.00 to $310.00 and gave the company an "overweight" rating in a research note on Monday, August 3rd. BMO Capital Markets boosted their price target on shares of Automatic Data Processing from $248.00 to $305.00 and gave the company a "market perform" rating in a research report on Wednesday, July 29th. Morgan Stanley upped their price target on shares of Automatic Data Processing from $240.00 to $286.00 and gave the stock an "equal weight" rating in a report on Thursday, July 30th. Stifel Nicolaus upped their price objective on shares of Automatic Data Processing from $260.00 to $285.00 and gave the stock a "hold" rating in a research report on Thursday, July 30th. Finally, UBS Group raised their price objective on Automatic Data Processing from $260.00 to $270.00 and gave the company a "neutral" rating in a report on Wednesday, July 22nd. Three research analysts have rated the stock with a Buy rating, eight have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the stock has an average rating of "Hold" and a consensus price target of $280.64.

Automatic Data Processing Stock Down 2.6%

Shares of Automatic Data Processing stock traded down $7.74 during trading on Wednesday, reaching $285.37. 3,085,092 shares of the company traded hands, compared to its average volume of 2,846,800. The company has a 50 day moving average price of $276.46 and a 200-day moving average price of $240.47. Automatic Data Processing has a 1-year low of $188.16 and a 1-year high of $309.40. The company has a debt-to-equity ratio of 0.82, a current ratio of 1.05 and a quick ratio of 1.05. The firm has a market capitalization of $113.08 billion, a PE ratio of 26.09, a P/E/G ratio of 2.75 and a beta of 0.83.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last issued its quarterly earnings data on Wednesday, October 28th. The business services provider reported $2.82 EPS for the quarter, topping the consensus estimate of $2.77 by $0.05. Automatic Data Processing had a return on equity of 71.34% and a net margin of 20.11%. The firm had revenue of $5.49 billion during the quarter, compared to the consensus estimate of $5.48 billion. During the same period in the prior year, the business posted $2.49 earnings per share. The company's quarterly revenue was up 6.1% compared to the same quarter last year. As a group, equities research analysts expect that Automatic Data Processing will post 12.27 earnings per share for the current fiscal year.

Insider Activity at Automatic Data Processing

In other Automatic Data Processing news, VP Brian L. Michaud sold 120 shares of the company's stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $279.70, for a total value of $33,564.00. Following the completion of the sale, the vice president owned 18,442 shares in the company, valued at $5,158,227.40. This represents a 0.65% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP David Kwon sold 798 shares of Automatic Data Processing stock in a transaction on Thursday, August 20th. The shares were sold at an average price of $280.00, for a total transaction of $223,440.00. Following the transaction, the vice president owned 13,193 shares in the company, valued at approximately $3,694,040. This trade represents a 5.70% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 33,773 shares of company stock worth $9,450,629. 0.15% of the stock is owned by insiders.

Institutional Trading of Automatic Data Processing

A number of institutional investors and hedge funds have recently bought and sold shares of ADP. Polaris Financial Partners purchased a new stake in shares of Automatic Data Processing in the third quarter worth about $25,000. Whipplewood Advisors LLC lifted its position in Automatic Data Processing by 2,740.0% during the first quarter. Whipplewood Advisors LLC now owns 142 shares of the business services provider's stock valued at $29,000 after purchasing an additional 137 shares during the last quarter. Kelly Lawrence W & Associates Inc. CA bought a new position in Automatic Data Processing during the second quarter valued at $34,000. Cornerstone Financial Management LLC lifted its position in Automatic Data Processing by 59.2% during the second quarter. Cornerstone Financial Management LLC now owns 156 shares of the business services provider's stock valued at $35,000 after purchasing an additional 58 shares during the last quarter. Finally, N.E.W. Advisory Services LLC purchased a new position in shares of Automatic Data Processing in the 2nd quarter worth $36,000. 80.03% of the stock is currently owned by institutional investors.

Automatic Data Processing News Summary

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

• Positive Sentiment: Quarterly results exceeded expectations: ADP reported adjusted earnings of $2.82 per share, above the roughly $2.77–$2.78 consensus, while revenue rose 6.1% year over year to $5.49 billion, slightly ahead of estimates. Growth was supported by segment performance and higher client-funds interest income. ADP Reports First Quarter Fiscal 2027 Results
• Positive Sentiment: Full-year outlook improved: Management raised its fiscal 2027 adjusted earnings and revenue-growth outlook, citing continued business momentum and increasing adoption of artificial-intelligence capabilities. The guidance increase is a favorable signal for future earnings. ADP boosts FY2027 earnings, revenue growth after Q1 results beat
• Positive Sentiment: New distribution partnership: PNC Bank and ADP announced an embedded payroll offering that will integrate payroll, HR, benefits, time, insurance and retirement services into PNC’s digital-banking platform. The arrangement could expand ADP’s reach among small businesses. PNC Bank and ADP Announce Embedded Payroll Solution for Small Businesses
• Neutral Sentiment: Mixed analyst signals: Guggenheim raised its price target to $340, while UBS maintained a Hold rating. This suggests upside recognition but also caution about ADP’s valuation and near-term risk. Guggenheim raised target for Automatic Data Processing stock
• Negative Sentiment: Investors may be taking profits: Despite the earnings and guidance beats, the results were only modestly ahead of consensus. With ADP trading at a relatively demanding earnings multiple and near its 52-week high, the market may have expected a larger upside surprise, contributing to a sell-the-news reaction.

About Automatic Data Processing

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.

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