Automatic Data Processing’s (ADP) “Buy” Rating Reiterated at Guggenheim

Guggenheim reissued their buy rating on shares of Automatic Data Processing (NASDAQ:ADP) in a research note published on Thursday,Benzinga reports. Guggenheim currently has a $340.00 price target on the business services provider’s stock.

Other equities research analysts also recently issued research reports about the stock. Morgan Stanley lifted their price target on shares of Automatic Data Processing from $240.00 to $286.00 and gave the stock an “equal weight” rating in a research note on Thursday, July 30th. Citigroup boosted their price objective on shares of Automatic Data Processing from $230.00 to $287.00 and gave the stock a “neutral” rating in a report on Thursday, July 30th. Wells Fargo & Company upped 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 raised their target price on Automatic Data Processing from $260.00 to $270.00 and gave the company a “neutral” rating in a research note on Wednesday, July 22nd. Finally, Jefferies Financial Group lifted their target price on Automatic Data Processing from $225.00 to $250.00 and gave the stock an “underperform” rating in a research report on Wednesday. Three investment analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $283.27.

Automatic Data Processing Trading Up 2.7%

ADP opened at $293.84 on Thursday. The firm has a market capitalization of $116.43 billion, a P/E ratio of 26.05, a P/E/G ratio of 2.65 and a beta of 0.83. The firm’s 50 day moving average is $277.25 and its 200-day moving average is $240.83. Automatic Data Processing has a 52-week low of $188.16 and a 52-week high of $309.40. The company has a quick ratio of 1.05, a current ratio of 1.03 and a debt-to-equity ratio of 0.98.

Automatic Data Processing (NASDAQ:ADP) last posted its earnings results on Wednesday, October 28th. The business services provider reported $2.82 EPS for the quarter, topping analysts’ consensus estimates of $2.77 by $0.05. The business had revenue of $5.49 billion for the quarter, compared to analysts’ expectations of $5.48 billion. Automatic Data Processing had a net margin of 20.33% and a return on equity of 77.01%. The business’s revenue for the quarter was up 6.1% compared to the same quarter last year. During the same period in the previous year, the company posted $2.49 earnings per share. Analysts expect that Automatic Data Processing will post 12.36 EPS for the current fiscal year.

Automatic Data Processing Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Friday, September 11th were paid a dividend of $1.70 per share. This represents a $6.80 annualized dividend and a dividend yield of 2.3%. The ex-dividend date was Friday, September 11th. Automatic Data Processing’s dividend payout ratio is 60.28%.

Insider Activity at Automatic Data Processing

In other news, VP Joseph Desilva sold 631 shares of the firm’s stock in a transaction that occurred on Thursday, September 3rd. The shares were sold at an average price of $282.87, for a total transaction of $178,490.97. Following the completion of the sale, the vice president owned 18,824 shares of the company’s stock, valued at approximately $5,324,744.88. This trade represents a 3.24% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Maria Black sold 29,810 shares of Automatic Data Processing stock in a transaction on 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 completion of the sale, the chief executive officer owned 80,624 shares of the company’s stock, valued at approximately $22,648,087.84. This trade represents a 26.99% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 31,359 shares of company stock worth $8,809,422 over the last three months. 0.15% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the stock. Polaris Financial Partners bought a new stake in Automatic Data Processing in the third quarter valued at about $25,000. Next Level Wealth Planning LLC acquired a new stake in Automatic Data Processing during the third quarter valued at approximately $26,000. Whipplewood Advisors LLC lifted its holdings in Automatic Data Processing by 2,740.0% during the 1st quarter. Whipplewood Advisors LLC now owns 142 shares of the business services provider’s stock worth $29,000 after buying an additional 137 shares during the last quarter. Kelly Lawrence W & Associates Inc. CA bought a new position in Automatic Data Processing during the 2nd quarter worth approximately $34,000. Finally, Cornerstone Financial Management LLC grew its position in shares of Automatic Data Processing by 59.2% in the 2nd quarter. Cornerstone Financial Management LLC now owns 156 shares of the business services provider’s stock worth $35,000 after acquiring an additional 58 shares in the last quarter. 80.03% of the stock is currently owned by institutional investors.

Key Stories Impacting Automatic Data Processing

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

• Positive Sentiment: Raised fiscal 2027 outlook: ADP now forecasts 10%–12% growth in adjusted earnings per share and raised its outlook for client-funds interest revenue to $1.59 billion–$1.61 billion. The improved guidance is the clearest near-term catalyst for the stock. ADP forecasts fiscal 2027 adjusted EPS growth
• Positive Sentiment: Quarterly results exceeded expectations: ADP reported earnings of $2.82 per share versus the $2.77 consensus estimate, while revenue of $5.49 billion modestly topped forecasts and increased 6.1% year over year. Management also highlighted AI momentum during the earnings call. ADP fiscal 2027 first-quarter results
• Positive Sentiment: Some analysts see additional upside: Guggenheim reaffirmed a Buy rating with a $340 price target, while Stifel raised its target to $305. Jefferies also lifted its target, although it retained an Underperform rating. Guggenheim ADP rating
• Neutral Sentiment: Expansion in small-business payroll: ADP is broadening its reach among small-business customers, a move that could support long-term client and revenue growth but may require additional investment. ADP small-business payroll expansion
• Negative Sentiment: Valuation and analyst caution: Citi, Morgan Stanley, and RBC maintain neutral or equivalent ratings with targets around $288–$295, while Jefferies remains bearish. A Seeking Alpha analysis also argues that investors should not chase the rally despite ADP’s attractive dividend-growth record. ADP dividend growth and valuation analysis

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.