Vanguard Group Inc. Reduces Stock Position in Automatic Data Processing, Inc. $ADP

Key Points

• Vanguard Group trimmed its ADP stake by 0.3% in Q4, selling 109,715 shares and finishing the quarter with 41,579,918 shares — about 10.28% of the company valued at ~$10.7 billion.
• ADP beat quarterly estimates (EPS $2.62 vs $2.57; revenue $5.36B vs $5.34B), set FY2026 guidance of 10.091–11.011 EPS, and its board approved a $6 billion share buyback while declaring a $1.70 quarterly dividend (3.5% yield).
• Analysts have pared price targets recently and the consensus rating is Hold with a $273.85 target, while the stock trades near $196.53 — well below its one‑year high of $329.93.

Vanguard Group Inc. cut its holdings in shares of Automatic Data Processing, Inc. (NASDAQ:ADP - Free Report) by 0.3% during the 4th quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The fund owned 41,579,918 shares of the business services provider's stock after selling 109,715 shares during the quarter. Vanguard Group Inc. owned approximately 10.28% of Automatic Data Processing worth $10,695,602,000 at the end of the most recent quarter.

A number of other institutional investors have also made changes to their positions in the company. Capital Research Global Investors increased its holdings in shares of Automatic Data Processing by 1.5% in the 3rd quarter. Capital Research Global Investors now owns 8,021,194 shares of the business services provider's stock valued at $2,354,220,000 after acquiring an additional 116,074 shares during the last quarter. Wellington Management Group LLP increased its holdings in shares of Automatic Data Processing by 47.8% in the 3rd quarter. Wellington Management Group LLP now owns 6,830,294 shares of the business services provider's stock valued at $2,004,691,000 after acquiring an additional 2,208,927 shares during the last quarter. Invesco Ltd. increased its holdings in shares of Automatic Data Processing by 5.7% in the 3rd quarter. Invesco Ltd. now owns 4,837,993 shares of the business services provider's stock valued at $1,419,951,000 after acquiring an additional 261,312 shares during the last quarter. Ameriprise Financial Inc. increased its holdings in shares of Automatic Data Processing by 3.3% in the 3rd quarter. Ameriprise Financial Inc. now owns 4,323,554 shares of the business services provider's stock valued at $1,264,118,000 after acquiring an additional 136,142 shares during the last quarter. Finally, Mitsubishi UFJ Asset Management Co. Ltd. increased its holdings in shares of Automatic Data Processing by 32.1% in the 3rd quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 3,273,700 shares of the business services provider's stock valued at $960,831,000 after acquiring an additional 796,379 shares during the last quarter. 80.03% of the stock is currently owned by institutional investors.

Insider Activity

In other news, VP Brian L. Michaud sold 1,000 shares of the company's stock in a transaction on Friday, February 6th. The stock was sold at an average price of $234.18, for a total value of $234,180.00. Following the completion of the sale, the vice president owned 15,310 shares in the company, valued at $3,585,295.80. This represents a 6.13% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. Also, VP David Foskett sold 266 shares of the company's stock in a transaction on Thursday, February 5th. The shares were sold at an average price of $237.00, for a total value of $63,042.00. Following the sale, the vice president directly owned 10,954 shares of the company's stock, valued at approximately $2,596,098. This represents a 2.37% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 1,809 shares of company stock worth $410,410 over the last 90 days. 0.20% of the stock is currently owned by company insiders.

Analysts Set New Price Targets

A number of equities research analysts have recently weighed in on ADP shares. Wells Fargo & Company lowered their price target on Automatic Data Processing from $262.00 to $214.00 and set an "underweight" rating for the company in a report on Friday, March 27th. Weiss Ratings reiterated a "hold (c+)" rating on shares of Automatic Data Processing in a report on Monday, December 29th. Morgan Stanley lowered their price objective on Automatic Data Processing from $311.00 to $274.00 and set an "equal weight" rating for the company in a research note on Thursday, January 29th. UBS Group lowered their price objective on Automatic Data Processing from $220.00 to $210.00 and set a "neutral" rating for the company in a research note on Monday, April 13th. Finally, Cantor Fitzgerald lowered their price objective on Automatic Data Processing from $306.00 to $244.00 and set an "overweight" rating for the company in a research note on Tuesday, April 21st. One analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, nine have assigned a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Hold" and a consensus target price of $273.85.

Automatic Data Processing Trading Down 1.0%

Shares of ADP stock opened at $196.53 on Friday. The company has a debt-to-equity ratio of 0.62, a quick ratio of 1.03 and a current ratio of 1.03. The firm has a market capitalization of $79.13 billion, a PE ratio of 18.90 and a beta of 0.85. The stock has a fifty day moving average of $207.37 and a two-hundred day moving average of $240.58. Automatic Data Processing, Inc. has a 1 year low of $188.16 and a 1 year high of $329.93.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last announced its quarterly earnings data on Wednesday, January 28th. The business services provider reported $2.62 earnings per share for the quarter, beating the consensus estimate of $2.57 by $0.05. The business had revenue of $5.36 billion during the quarter, compared to analyst estimates of $5.34 billion. Automatic Data Processing had a return on equity of 68.44% and a net margin of 19.96%.The company's revenue was up 6.2% on a year-over-year basis. During the same quarter in the prior year, the firm posted $2.35 earnings per share. Automatic Data Processing has set its FY 2026 guidance at 10.091-11.011 EPS. As a group, research analysts expect that Automatic Data Processing, Inc. will post 10.96 EPS for the current year.

Automatic Data Processing announced that its Board of Directors has approved a stock repurchase plan on Wednesday, January 14th that authorizes the company to buyback $6.00 billion in shares. This buyback authorization authorizes the business services provider to repurchase up to 5.8% of its shares through open market purchases. Shares buyback plans are usually an indication that the company's leadership believes its stock is undervalued.

Automatic Data Processing Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, July 1st. Stockholders of record on Friday, June 12th will be issued a $1.70 dividend. The ex-dividend date is Friday, June 12th. This represents a $6.80 annualized dividend and a dividend yield of 3.5%. Automatic Data Processing's dividend payout ratio is 65.38%.

Automatic Data Processing Profile

Automatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.

ADP's product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.

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