Wells Fargo & Company Upgrades Automatic Data Processing (NASDAQ:ADP) to Strong Sell

Key Points

• Wells Fargo & Company has downgraded Automatic Data Processing (ADP) to a "strong sell" rating, indicating a significant change in the outlook for the company's stock.
• Competing analysts offer mixed reviews, with Stifel Nicolaus increasing their price target to $318 with a "hold" rating, while UBS Group reduced theirs from $315 to $290, maintaining a "neutral" stance.
• Despite recent challenges, ADP reported a profit of $2.26 EPS, surpassing analyst expectations, and has set FY 2026 guidance between $10.811 and $11.011 EPS.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) was upgraded by Wells Fargo & Company to a "strong sell" rating in a research note issued to investors on Tuesday,Zacks.com reports.

Other research analysts have also issued research reports about the stock. Stifel Nicolaus upped their price objective on shares of Automatic Data Processing from $305.00 to $318.00 and gave the company a "hold" rating in a research report on Thursday, July 31st. Dbs Bank raised shares of Automatic Data Processing to a "hold" rating in a research report on Thursday, August 21st. BMO Capital Markets raised shares of Automatic Data Processing to a "hold" rating and set a $340.00 price target for the company in a research report on Thursday, July 10th. UBS Group dropped their price target on shares of Automatic Data Processing from $315.00 to $290.00 and set a "neutral" rating for the company in a research report on Wednesday, September 17th. Finally, Weiss Ratings reissued a "buy (b)" rating on shares of Automatic Data Processing in a research report on Wednesday, October 8th. Three equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus price target of $314.09.

Automatic Data Processing Stock Down 0.0%

Shares of ADP opened at $283.95 on Tuesday. The company has a 50-day simple moving average of $294.18 and a 200-day simple moving average of $302.01. The firm has a market capitalization of $115.03 billion, a P/E ratio of 28.45, a P/E/G ratio of 2.60 and a beta of 0.82. The company has a debt-to-equity ratio of 0.64, a quick ratio of 1.05 and a current ratio of 1.05. Automatic Data Processing has a 52 week low of $272.62 and a 52 week high of $329.93.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last announced its quarterly earnings data on Wednesday, July 30th. The business services provider reported $2.26 EPS for the quarter, beating analysts' consensus estimates of $2.23 by $0.03. The business had revenue of $5.13 billion during the quarter, compared to analyst estimates of $5.05 billion. Automatic Data Processing had a net margin of 19.84% and a return on equity of 72.84%. The firm's revenue for the quarter was up 6.3% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.09 earnings per share. Automatic Data Processing has set its FY 2026 guidance at 10.811-11.011 EPS. On average, equities research analysts expect that Automatic Data Processing will post 9.93 earnings per share for the current year.

Insider Activity at Automatic Data Processing

In other news, VP Don Mcguire sold 13,599 shares of the firm's stock in a transaction that occurred on Wednesday, September 3rd. The shares were sold at an average price of $296.57, for a total transaction of $4,033,055.43. Following the completion of the sale, the vice president owned 17,684 shares of the company's stock, valued at approximately $5,244,543.88. This trade represents a 43.47% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, VP David Foskett sold 1,373 shares of the firm's stock in a transaction that occurred on Wednesday, September 3rd. The stock was sold at an average price of $296.57, for a total transaction of $407,190.61. Following the sale, the vice president directly owned 11,781 shares of the company's stock, valued at approximately $3,493,891.17. The trade was a 10.44% decrease in their position. The disclosure for this sale can be found here. In the last quarter, insiders have sold 52,516 shares of company stock valued at $15,632,410. Insiders own 0.20% of the company's stock.

Institutional Trading of Automatic Data Processing

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Vanguard Group Inc. increased its holdings in shares of Automatic Data Processing by 0.9% in the second quarter. Vanguard Group Inc. now owns 41,300,182 shares of the business services provider's stock valued at $12,736,976,000 after purchasing an additional 350,298 shares in the last quarter. State Street Corp increased its holdings in shares of Automatic Data Processing by 1.0% in the second quarter. State Street Corp now owns 18,782,407 shares of the business services provider's stock valued at $5,820,445,000 after purchasing an additional 187,415 shares in the last quarter. Geode Capital Management LLC increased its holdings in shares of Automatic Data Processing by 3.1% in the second quarter. Geode Capital Management LLC now owns 11,388,935 shares of the business services provider's stock valued at $3,511,698,000 after purchasing an additional 345,798 shares in the last quarter. Laurel Wealth Advisors LLC increased its holdings in shares of Automatic Data Processing by 30,110.7% in the second quarter. Laurel Wealth Advisors LLC now owns 4,668,758 shares of the business services provider's stock valued at $1,439,845,000 after purchasing an additional 4,653,304 shares in the last quarter. Finally, Invesco Ltd. increased its holdings in shares of Automatic Data Processing by 13.5% in the second quarter. Invesco Ltd. now owns 4,576,681 shares of the business services provider's stock valued at $1,411,449,000 after purchasing an additional 544,968 shares in the last quarter. Institutional investors and hedge funds own 80.03% of the company's stock.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions.

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