Automatic Data Processing (NASDAQ:ADP) Stock Rating Reaffirmed as Sector Perform by Royal Bank Of Canada

Key Points

• Royal Bank of Canada reaffirmed its “Sector Perform” rating on ADP with a $290 price target, implying approximately 1.28% upside from the referenced closing price.
• Analyst sentiment remains broadly cautious: ADP has a consensus “Hold” rating and an average price target of $282.73, despite some firms raising targets and assigning Buy or Overweight ratings.
• ADP’s latest quarterly results modestly exceeded expectations, with 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)'s stock had its "sector perform" rating reaffirmed by research analysts at Royal Bank Of Canada in a research note issued to investors on Thursday, Benzinga reports. They currently have a $290.00 price target on the business services provider's stock. Royal Bank Of Canada's price objective would suggest a potential upside of 1.28% from the company's previous close.

A number of other brokerages have also commented on ADP. Cantor Fitzgerald boosted their price objective on shares of Automatic Data Processing from $295.00 to $310.00 and gave the stock an "overweight" rating in a report on Monday, August 3rd. 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 target price on Automatic Data Processing from $230.00 to $287.00 and gave the stock a "neutral" rating in a research report on Thursday, July 30th. Stifel Nicolaus boosted their price target on Automatic Data Processing from $285.00 to $305.00 and gave the stock a "hold" rating in a research note on Thursday. Finally, BMO Capital Markets increased their price target on Automatic Data Processing from $248.00 to $305.00 and gave the company a "market perform" rating in a report on Wednesday, July 29th. Three research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, Automatic Data Processing has an average rating of "Hold" and a consensus price target of $282.73.

Automatic Data Processing Stock Up 0.3%

NASDAQ ADP traded up $0.95 on Thursday, reaching $286.32. The company had a trading volume of 896,239 shares, compared to its average volume of 2,837,134. The company has a debt-to-equity ratio of 0.82, a current ratio of 1.05 and a quick ratio of 1.05. Automatic Data Processing has a 1 year low of $188.16 and a 1 year high of $309.40. The firm has a 50-day moving average of $276.79 and a 200-day moving average of $240.57. The firm has a market capitalization of $113.46 billion, a PE ratio of 26.17, a P/E/G ratio of 2.75 and a beta of 0.83.

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

Insider Activity at Automatic Data Processing

In other 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 completion of the sale, the vice president owned 13,193 shares of the company's stock, valued at approximately $3,694,040. The trade was a 5.70% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Maria Black sold 29,810 shares of the 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 transaction, the chief executive officer directly owned 80,624 shares in the company, valued at $22,648,087.84. The trade was a 26.99% decrease in their position. 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 sold 31,359 shares of company stock valued at $8,809,422 in the last 90 days. 0.15% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in ADP. Trek Financial LLC acquired a new stake in Automatic Data Processing during the third quarter valued at approximately $212,000. True Freedom Investing LLC raised its holdings in Automatic Data Processing by 10.4% during the 3rd quarter. True Freedom Investing LLC now owns 23,260 shares of the business services provider's stock worth $6,003,000 after buying an additional 2,187 shares during the period. Bank Julius Baer & Co. Ltd Zurich lifted its stake in 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 valued at $160,631,000 after buying an additional 226,942 shares in the last quarter. Pinkerton Wealth LLC lifted its stake 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 valued at $6,091,000 after buying an additional 1,985 shares in the last quarter. Finally, Virtue Capital Management LLC acquired a new position in shares of Automatic Data Processing in the third quarter worth about $251,000. Institutional investors and hedge funds own 80.03% of the company's stock.

Automatic Data Processing News Summary

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

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.

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