Automatic Data Processing (NASDAQ:ADP) Stock Price Expected to Rise, Morgan Stanley Analyst Says

Key Points

• Morgan Stanley raised ADP’s price target from $286 to $288 while maintaining an “equal weight” rating, implying only about 0.75% upside from the referenced share price.
• Analyst sentiment remains mixed: MarketBeat’s consensus rating is “Hold,” with three Buy, eight Hold, and two Sell ratings and an average price target of $282.21.
• ADP exceeded quarterly expectations, reporting adjusted EPS of $2.82 versus the $2.77 consensus and revenue of $5.49 billion, up 6.1% year over year.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) had its target price raised by Morgan Stanley from $286.00 to $288.00 in a report issued on Thursday, Benzinga reports. The firm presently has an "equal weight" rating on the business services provider's stock. Morgan Stanley's price objective indicates a potential upside of 0.75% from the company's current price.

Other analysts have also issued reports about the stock. Jefferies Financial Group increased their price objective on shares of Automatic Data Processing from $225.00 to $250.00 and gave the stock an "underperform" rating in a research report on Wednesday. Stifel Nicolaus increased their price objective on shares of Automatic Data Processing from $285.00 to $305.00 and gave the company a "hold" rating in a research report on Thursday. Weiss Ratings upgraded Automatic Data Processing from a "hold (c)" rating to a "hold (c+)" rating in a research note on Tuesday, September 22nd. Citigroup lifted their price target on Automatic Data Processing from $230.00 to $287.00 and gave the company a "neutral" rating in a research note on Thursday, July 30th. Finally, Wells Fargo & Company raised their target price on Automatic Data Processing from $248.00 to $283.00 and gave the company an "equal weight" rating in a research report on Thursday, July 30th. Three research analysts have rated the stock with a Buy rating, eight have given a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company has an average rating of "Hold" and an average target price of $282.21.

Automatic Data Processing Stock Performance

Shares of ADP traded up $0.48 during mid-day trading on Thursday, hitting $285.85. 656,050 shares of the company traded hands, compared to its average volume of 2,836,082. The stock has a market cap of $113.27 billion, a price-to-earnings ratio of 26.11, a P/E/G ratio of 2.75 and a beta of 0.83. The company has a debt-to-equity ratio of 0.82, a quick ratio of 1.05 and a current ratio of 1.05. The stock has a 50-day moving average price of $276.79 and a two-hundred day moving average price of $240.57. Automatic Data Processing has a 1 year low of $188.16 and a 1 year high of $309.40.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last announced its earnings results on Wednesday, October 28th. The business services provider reported $2.82 EPS for the quarter, beating analysts' consensus estimates of $2.77 by $0.05. The business had revenue of $5.49 billion during the quarter, compared to analysts' expectations of $5.48 billion. Automatic Data Processing had a net margin of 20.11% and a return on equity of 71.34%. The firm's revenue was up 6.1% on a year-over-year basis. During the same period in the prior year, the company earned $2.49 earnings per share. Equities analysts anticipate that Automatic Data Processing will post 12.27 earnings per share for the current year.

Insider Buying and Selling

In related news, CEO Maria Black sold 29,810 shares of the firm's stock in a transaction that occurred on Wednesday, September 2nd. The shares were sold at an average price of $280.91, for a total transaction of $8,373,927.10. Following the sale, the chief executive officer owned 80,624 shares in the company, valued at approximately $22,648,087.84. This trade represents a 26.99% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Joseph Desilva sold 631 shares of the stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $282.87, for a total value of $178,490.97. Following the transaction, the vice president owned 18,824 shares in the company, valued at $5,324,744.88. This trade represents a 3.24% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 31,359 shares of company stock valued at $8,809,422 over the last three months. Insiders own 0.15% of the company's stock.

Hedge Funds Weigh In On Automatic Data Processing

Several large investors have recently modified their holdings of the stock. Trek Financial LLC bought a new stake in shares of Automatic Data Processing during the third quarter worth about $212,000. True Freedom Investing LLC grew its holdings in Automatic Data Processing by 10.4% in the third quarter. True Freedom Investing LLC now owns 23,260 shares of the business services provider's stock worth $6,003,000 after purchasing an additional 2,187 shares during the period. Bank Julius Baer & Co. Ltd Zurich increased its position in shares of Automatic Data Processing by 57.5% during the third quarter. Bank Julius Baer & Co. Ltd Zurich now owns 621,487 shares of the business services provider's stock worth $160,631,000 after acquiring an additional 226,942 shares in the last quarter. Pinkerton Wealth LLC lifted its holdings in Automatic Data Processing by 9.2% during the third quarter. Pinkerton Wealth LLC now owns 23,604 shares of the business services provider's stock worth $6,091,000 after acquiring an additional 1,985 shares during the period. Finally, Virtue Capital Management LLC purchased a new stake in Automatic Data Processing in the third quarter worth $251,000. Institutional investors own 80.03% of the company's stock.

Key Stories Impacting Automatic Data Processing

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

• Positive Sentiment: Fiscal Q1 earnings beat expectations. ADP reported adjusted EPS of $2.82, up from $2.49 a year earlier and ahead of the $2.77 consensus estimate. Revenue increased 6.1% year over year to $5.49 billion, narrowly exceeding expectations. ADP Reports First Quarter Fiscal 2027 Results
• Positive Sentiment: Management raised its fiscal 2027 outlook. ADP now forecasts 10%–12% adjusted EPS growth and expects client-funds interest revenue of approximately $1.59 billion to $1.61 billion. Commentary also highlighted momentum in artificial-intelligence adoption, potentially supporting future growth. ADP boosts FY2027 earnings and revenue growth after Q1 results beat
• Positive Sentiment: Guggenheim reaffirmed a Buy rating and raised its price target to $340, implying roughly 19% upside from the referenced share price. ADP also announced an embedded payroll, HR and benefits solution with PNC Bank, expanding distribution to small-business customers. Guggenheim ADP rating PNC Bank and ADP announce embedded payroll solution
• Neutral Sentiment: Analyst views remain mixed. Stifel raised its price target from $285 to $305 but retained a Hold rating, suggesting only moderate upside at current levels. ADP trades at a relatively demanding valuation, with a reported P/E ratio above 26.
• Negative Sentiment: Jefferies maintained an Underperform rating despite increasing its target from $225 to $250. The target remains below the referenced share price, reinforcing concerns that much of ADP’s earnings growth is already reflected in the stock. Jefferies ADP rating

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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