Automatic Data Processing (ADP) Lowered to “Hold” at Zacks Investment Research

Zacks Investment Research downgraded shares of Automatic Data Processing (NYSE:ADP) from a buy rating to a hold rating in a research report report published on Tuesday, October 17th.

According to Zacks, “ADP has outperformed the industry on a year-to-date basis. We expect investments in new initiatives will continue to weigh on the company’s near-term bottom-line results. Increasing competition is also a headwind. Moreover, continuing crticism from activist investor Bill Ackman is expected to management under pressure, which will remain an overhang on the stock. Nonetheless, the company’s higher revenue per client and a decent customer retention ratio place it in an advantageous position. Also, ADP holds a dominant position in the payroll processing and human capital management market, primarily due to its robust product portfolio.”

A number of other research firms have also commented on ADP. Goldman Sachs Group, Inc. (The) lowered shares of Automatic Data Processing from a buy rating to a neutral rating and lowered their price target for the stock from $115.00 to $108.00 in a research report on Tuesday, June 20th. BidaskClub lowered shares of Automatic Data Processing from a buy rating to a hold rating in a research report on Wednesday, July 12th. Barclays PLC downgraded shares of Automatic Data Processing from an overweight rating to an equal weight rating and reduced their price target for the company from $110.00 to $105.00 in a research note on Tuesday, July 18th. William Blair downgraded shares of Automatic Data Processing from an outperform rating to a market perform rating in a research note on Friday, July 21st. Finally, BMO Capital Markets reiterated an outperform rating and set a $105.00 target price (up from $100.00) on shares of Automatic Data Processing in a research report on Friday, July 28th. One equities research analyst has rated the stock with a sell rating, twelve have assigned a hold rating and five have issued a buy rating to the company. Automatic Data Processing currently has an average rating of Hold and a consensus target price of $111.57.

Shares of Automatic Data Processing (ADP) traded down $1.35 on Tuesday, reaching $110.89. 1,507,272 shares of the company traded hands, compared to its average volume of 1,990,000. Automatic Data Processing has a fifty-two week low of $87.58 and a fifty-two week high of $121.77.

Automatic Data Processing (NYSE:ADP) last announced its quarterly earnings results on Thursday, November 2nd. The business services provider reported $0.91 EPS for the quarter, beating analysts’ consensus estimates of $0.85 by $0.06. The firm had revenue of $3.08 billion during the quarter, compared to analysts’ expectations of $3.06 billion. Automatic Data Processing had a net margin of 13.04% and a return on equity of 40.61%. The company’s revenue for the quarter was up 5.6% compared to the same quarter last year. During the same quarter last year, the company posted $0.86 earnings per share.

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In related news, VP Brock Albinson sold 3,663 shares of the business’s stock in a transaction dated Friday, September 1st. The shares were sold at an average price of $106.54, for a total value of $390,256.02. Following the transaction, the vice president now directly owns 6,287 shares of the company’s stock, valued at approximately $669,816.98. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, VP Maria Black sold 631 shares of the business’s stock in a transaction dated Saturday, September 2nd. The shares were sold at an average price of $106.64, for a total value of $67,289.84. Following the completion of the sale, the vice president now owns 10,550 shares in the company, valued at $1,125,052. The disclosure for this sale can be found here.

A number of institutional investors and hedge funds have recently modified their holdings of ADP. BlackRock Inc. boosted its stake in Automatic Data Processing by 1,971.2% in the first quarter. BlackRock Inc. now owns 29,631,769 shares of the business services provider’s stock worth $3,033,995,000 after buying an additional 28,201,085 shares in the last quarter. Janus Henderson Group PLC boosted its stake in shares of Automatic Data Processing by 5,962.5% during the second quarter. Janus Henderson Group PLC now owns 4,013,865 shares of the business services provider’s stock valued at $411,260,000 after purchasing an additional 3,947,657 shares during the period. Vanguard Group Inc. lifted its stake in Automatic Data Processing by 4.4% in the first quarter. Vanguard Group Inc. now owns 34,188,021 shares of the business services provider’s stock worth $3,500,512,000 after acquiring an additional 1,430,863 shares during the period. Canada Pension Plan Investment Board lifted its stake in Automatic Data Processing by 42,776.7% in the third quarter. Canada Pension Plan Investment Board now owns 1,376,771 shares of the business services provider’s stock worth $150,509,000 after acquiring an additional 1,373,560 shares during the period. Finally, Fundsmith LLP lifted its stake in Automatic Data Processing by 29.0% in the second quarter. Fundsmith LLP now owns 5,176,340 shares of the business services provider’s stock worth $530,368,000 after acquiring an additional 1,164,972 shares during the period.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc (ADP) is a provider of human capital management (HCM) solutions to employers, offering solutions to businesses of various sizes. The Company also provides business process outsourcing solutions. Its segments include Employer Services and Professional Employer Organization (PEO) Services.

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