Morgan Stanley Has Lowered Expectations for Automatic Data Processing (NASDAQ:ADP) Stock Price

Key Points

• Morgan Stanley cut its price target on ADP to $274 (from $311) while keeping an "equal weight" rating, a target that still implies about a 37.46% upside from the prior close.
• Analyst sentiment is mixed but cautious: the consensus rating is "Hold" with an average price target of about $273.85, and multiple brokers (Wells Fargo, JPMorgan, Stifel) have recently trimmed targets or downgraded the stock.
• ADP is trading near ~$199 (52‑week range $188–$329), recently beat quarterly EPS and revenue estimates, and its board authorized a $6.00 billion buyback, representing up to ~5.8% of shares outstanding.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) had its price target decreased by research analysts at Morgan Stanley from $311.00 to $274.00 in a note issued to investors on Tuesday,MarketScreener reports. The brokerage presently has an "equal weight" rating on the business services provider's stock. Morgan Stanley's price target indicates a potential upside of 37.46% from the stock's previous close.

A number of other brokerages have also commented on ADP. Wells Fargo & Company cut their price target on shares of Automatic Data Processing from $262.00 to $214.00 and set an "underweight" rating on the stock in a report on Friday, March 27th. Stifel Nicolaus cut their price target on shares of Automatic Data Processing from $280.00 to $270.00 and set a "hold" rating on the stock in a report on Monday, February 9th. JPMorgan Chase & Co. cut their price target on shares of Automatic Data Processing from $295.00 to $275.00 and set an "underweight" rating on the stock in a report on Thursday, January 29th. Guggenheim began coverage on shares of Automatic Data Processing in a report on Thursday, March 19th. They set a "buy" rating and a $270.00 price target on the stock. Finally, Weiss Ratings reiterated a "hold (c+)" rating on shares of Automatic Data Processing in a report on Monday, December 29th. One investment analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, nine have given a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, Automatic Data Processing has a consensus rating of "Hold" and an average price target of $273.85.

Automatic Data Processing Price Performance

Automatic Data Processing stock traded up $2.10 during mid-day trading on Tuesday, reaching $199.33. The company had a trading volume of 2,627,953 shares, compared to its average volume of 3,418,466. Automatic Data Processing has a fifty-two week low of $188.16 and a fifty-two week high of $329.93. The company has a current ratio of 1.03, a quick ratio of 1.03 and a debt-to-equity ratio of 0.62. The company has a market cap of $80.26 billion, a P/E ratio of 19.15 and a beta of 0.85. The business has a fifty day simple moving average of $207.07 and a 200 day simple moving average of $239.60.

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

Automatic Data Processing declared that its Board of Directors has authorized a share repurchase program on Wednesday, January 14th that permits the company to buyback $6.00 billion in shares. This buyback authorization permits the business services provider to buy up to 5.8% of its shares through open market purchases. Shares buyback programs are typically a sign that the company's leadership believes its shares are undervalued.

Insider Buying and Selling

In other Automatic Data Processing news, VP David Foskett sold 266 shares of Automatic Data Processing 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 completion of the sale, the vice president directly owned 10,954 shares of the company's stock, valued at approximately $2,596,098. The trade was a 2.37% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, VP Brian L. Michaud sold 1,000 shares of the business's stock in a transaction dated Friday, February 6th. The stock was sold at an average price of $234.18, for a total transaction of $234,180.00. Following the sale, the vice president directly owned 15,310 shares of the company's stock, valued at approximately $3,585,295.80. The trade was a 6.13% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 1,809 shares of company stock valued at $410,410 over the last quarter. Insiders own 0.20% of the company's stock.

Institutional Investors Weigh In On Automatic Data Processing

Several hedge funds and other institutional investors have recently made changes to their positions in ADP. Northwestern Mutual Wealth Management Co. increased its position in shares of Automatic Data Processing by 6,493.0% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 3,468,180 shares of the business services provider's stock worth $892,120,000 after acquiring an additional 3,415,576 shares in the last quarter. Cardano Risk Management B.V. increased its position in shares of Automatic Data Processing by 950.1% during the fourth quarter. Cardano Risk Management B.V. now owns 3,563,180 shares of the business services provider's stock worth $916,557,000 after acquiring an additional 3,223,855 shares in the last quarter. Norges Bank bought a new stake in shares of Automatic Data Processing during the fourth quarter worth about $721,738,000. Wellington Management Group LLP increased its position in shares of Automatic Data Processing by 47.8% during the third quarter. Wellington Management Group LLP now owns 6,830,294 shares of the business services provider's stock worth $2,004,691,000 after acquiring an additional 2,208,927 shares in the last quarter. Finally, Clearbridge Investments LLC increased its position in shares of Automatic Data Processing by 133.3% during the fourth quarter. Clearbridge Investments LLC now owns 1,687,793 shares of the business services provider's stock worth $434,151,000 after acquiring an additional 964,405 shares in the last quarter. 80.03% of the stock is owned by institutional investors.

Automatic Data Processing Company 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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