Automatic Data Processing's (ADP) "Buy" Rating Reaffirmed at Guggenheim

Key Points

• Guggenheim reaffirmed its “Buy” rating on Automatic Data Processing and set a $340 price target, implying approximately 19.24% upside from the reported share price.
• ADP reported quarterly earnings of $2.82 per share, beating the $2.77 consensus estimate, while revenue rose 6.1% year over year to $5.49 billion.
• Analyst sentiment remains mixed: the stock has a consensus “Hold” rating and an average price target of $282.07, despite institutional investors owning about 80% of shares.

Automatic Data Processing (NASDAQ:ADP - Get Free Report)'s stock had its "buy" rating reiterated by investment analysts at Guggenheim in a research report issued on Thursday, Benzinga reports. They presently have a $340.00 price objective on the business services provider's stock. Guggenheim's price objective would indicate a potential upside of 19.24% from the company's current price.

ADP has been the subject of a number of other reports. Morgan Stanley increased their target price on Automatic Data Processing from $240.00 to $286.00 and gave the company an "equal weight" rating in a research report on Thursday, July 30th. Wells Fargo & Company boosted their price objective on shares of 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. UBS Group lifted 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. TD Cowen increased their target price on Automatic Data Processing from $216.00 to $223.00 and gave the company a "hold" rating in a research report on Monday, July 6th. Finally, Weiss Ratings raised shares of Automatic Data Processing from a "hold (c)" rating to a "hold (c+)" rating in a research report on Tuesday, September 22nd. Three equities research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and an average target price of $282.07.

Automatic Data Processing Stock Performance

Shares of ADP stock traded down $0.23 during trading hours on Thursday, reaching $285.14. The company had a trading volume of 250,133 shares, compared to its average volume of 2,833,703. 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 firm has a market cap of $112.99 billion, a PE ratio of 26.00, a price-to-earnings-growth ratio of 2.75 and a beta of 0.83. The business has a fifty day moving average price of $276.79 and a 200-day moving average price of $240.57. Automatic Data Processing has a one year low of $188.16 and a one year high of $309.40.

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

Insiders Place Their Bets

In other Automatic Data Processing news, VP Brian Michaud sold 120 shares of Automatic Data Processing stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $279.70, for a total transaction of $33,564.00. Following the completion of the sale, the vice president directly owned 18,442 shares of the company's stock, valued at $5,158,227.40. The trade was a 0.65% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Joseph Desilva sold 631 shares of the business's stock in a transaction that occurred on Thursday, September 3rd. The stock was sold at an average price of $282.87, for a total value of $178,490.97. Following the sale, the vice president owned 18,824 shares of the company's stock, valued at approximately $5,324,744.88. The trade was a 3.24% 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. Over the last ninety days, insiders sold 31,359 shares of company stock worth $8,809,422. 0.15% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Automatic Data Processing

Several large investors have recently modified their holdings of ADP. Thrive Wealth Management LLC lifted its stake in shares of Automatic Data Processing by 3.5% in the 2nd quarter. Thrive Wealth Management LLC now owns 1,085 shares of the business services provider's stock valued at $243,000 after purchasing an additional 37 shares during the period. Aviance Capital Partners LLC grew its position in shares of Automatic Data Processing by 0.4% in the 3rd quarter. Aviance Capital Partners LLC now owns 9,298 shares of the business services provider's stock valued at $2,399,000 after purchasing an additional 37 shares during the period. Tanager Wealth Management LLP increased its position in shares of Automatic Data Processing by 4.1% during the third quarter. Tanager Wealth Management LLP now owns 971 shares of the business services provider's stock worth $251,000 after acquiring an additional 38 shares in the last quarter. AMI Investment Management Inc. raised its stake in shares of Automatic Data Processing by 3.6% in the 3rd quarter. AMI Investment Management Inc. now owns 1,140 shares of the business services provider's stock valued at $294,000 after purchasing an additional 40 shares during the period. Finally, Aull & Monroe Investment Management Corp lifted its stake in Automatic Data Processing by 0.3% in the 3rd quarter. Aull & Monroe Investment Management Corp now owns 15,668 shares of the business services provider's stock valued at $4,043,000 after acquiring an additional 44 shares in the last quarter. Hedge funds and other institutional investors own 80.03% of the company's stock.

Key Automatic Data Processing News

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

• Positive Sentiment: Q1 earnings beat expectations: ADP reported adjusted earnings of $2.82 per share, above the $2.77 consensus estimate and up from $2.49 a year earlier. Revenue increased 6.1% year over year to $5.49 billion, narrowly exceeding estimates. ADP Reports First Quarter Fiscal 2027 Results
• Positive Sentiment: Fiscal 2027 outlook was raised: Management now expects adjusted EPS growth of approximately 10% to 12%. The company also increased its outlook for client funds interest revenue to $1.59 billion-$1.61 billion, providing a meaningful earnings tailwind. ADP Fiscal 2027 Outlook
• Positive Sentiment: AI adoption is adding momentum: Management highlighted continued demand for AI-enabled HR and payroll offerings during its earnings call, suggesting potential for stronger client engagement and long-term growth. ADP Earnings Call
• Positive Sentiment: New banking partnership expands distribution: PNC Bank and ADP announced an embedded payroll solution that integrates payroll, HR, benefits and workforce tools into PNC’s digital banking platform for small businesses. PNC Bank and ADP Partnership
• Neutral Sentiment: Stifel raised its price target to $305 from $285 but maintained a “hold” rating, indicating modest upside while signaling that the valuation may largely reflect recent gains.
• Negative Sentiment: Jefferies remains cautious: It lifted its target to $250 from $225 but kept an “underperform” rating, implying substantial downside from the referenced share price and highlighting disagreement over ADP’s valuation or growth prospects.

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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