Automatic Data Processing (ADP) – Investment Analysts’ Recent Ratings Updates

Several brokerages have updated their recommendations and price targets on shares of Automatic Data Processing (NASDAQ: ADP) in the last few weeks:

  • 2/5/2018 – Automatic Data Processing was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $133.00 price target on the stock. According to Zacks, “ADP reported stellar second quarter results. Both earnings and revenues also increased on year over year basis. The company also provided an encouraging forthcoming guidance. The forecast reflects the ongoing estimated benefits from the enactment of the Tax Cuts and Jobs Act. The stock has outperformed the industry over the past one year. We note that ADP holds a dominant position in the payroll processing and HCM market, primarily owing to its robust product portfolio. Moreover, with recent acquisition of WorkMarket, the company will be able to integrate its human capital management tools with WorkMarket’s contingent workers platform, thus enhancing its offerings. Nevertheless, we expect investments in new initiatives will continue to weigh on the company’s bottom-line results. Moreover, rising unemployment levels will negatively impact the company. Further, increasing competition is a major headwind.”
  • 2/1/2018 – Automatic Data Processing had its “neutral” rating reaffirmed by analysts at Royal Bank of Canada.
  • 2/1/2018 – Automatic Data Processing had its price target lowered by analysts at BMO Capital Markets from $122.00 to $121.00. They now have an “outperform” rating on the stock.
  • 2/1/2018 – Automatic Data Processing had its price target raised by analysts at Barclays PLC from $121.00 to $128.00. They now have an “equal weight” rating on the stock.
  • 2/1/2018 – Automatic Data Processing had its price target raised by analysts at Stifel Nicolaus from $113.00 to $133.00. They now have a “hold” rating on the stock.
  • 1/24/2018 – Automatic Data Processing was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “ADP is a provider of human capital management solutions and integrated computing solutions to vehicle dealers. The stock has outperformed the industry over the past one year. The company also raised fiscal 2018 guidance for revenues and earnings. We note that ADP holds a dominant position in the payroll processing and human capital management (HCM) market, primarily owing to its robust product portfolio. Moreover, with recent acquisition of WorkMarket, the company will be able to integrate its human capital management tools with WorkMarket’s contingent workers platform, thus enhancing its offerings. Nevertheless, we expect investments in new initiatives will continue to weigh on the company’s bottom-line results. Moreover, rising unemployment levels will negatively impact the company. Further, increasing competition is a major headwind.”
  • 1/24/2018 – Automatic Data Processing was upgraded by analysts at BidaskClub from a “sell” rating to a “hold” rating.
  • 1/23/2018 – Automatic Data Processing was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $136.00 price target on the stock. According to Zacks, “ADP is a provider of human capital management solutions and integrated computing solutions to vehicle dealers. The stock has outperformed the industry over the past one year. The company also raised fiscal 2018 guidance for revenues and earnings. We note that ADP holds a dominant position in the payroll processing and human capital management (HCM) market, primarily owing to its robust product portfolio. Moreover, with recent acquisition of WorkMarket, the company will be able to integrate its human capital management tools with WorkMarket’s contingent workers platform, thus enhancing its offerings. Nevertheless, we expect investments in new initiatives will continue to weigh on the company’s bottom-line results. Moreover, rising unemployment levels will negatively impact the company. Further, increasing competition is a major headwind.”
  • 1/13/2018 – Automatic Data Processing was downgraded by analysts at BidaskClub from a “hold” rating to a “sell” rating.
  • 1/12/2018 – Automatic Data Processing had its “neutral” rating reaffirmed by analysts at Citigroup Inc. They now have a $118.00 price target on the stock, up previously from $110.00.
  • 1/10/2018 – Automatic Data Processing was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “ADP is a provider of human capital management solutions and integrated computing solutions to vehicle dealers. The stock has outperformed the industry over the past one year. The company also raised fiscal 2018 guidance for revenues and earnings. We note that ADP holds a dominant position in the payroll processing and human capital management (HCM) market, primarily owing to its robust product portfolio. Moreover, activist investor Bill Ackman recently failed to get a position in the company's board. The overwhelming shareholder support for the existing board reflects strong confidence over management’s strategies, which is expected to drive share price in the near term. Nevertheless, we expect investments in new initiatives will continue to weigh on the company’s bottom-line results. Moreover, rising unemployment levels will negatively impact the company. Further, increasing competition is a major headwind.”
  • 1/5/2018 – Automatic Data Processing was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $133.00 price target on the stock. According to Zacks, “ADP is a provider of human capital management solutions and integrated computing solutions to vehicle dealers. We note that the stock has outperformed the industry over the past one year. The company also raised fiscal 2018 guidance for revenues and earnings. We note that ADP holds a dominant position in the payroll processing and human capital management (HCM) market, primarily owing to its robust product portfolio. Moreover, activist investor Bill Ackman recently failed to get a position in the company's board. The overwhelming shareholder support for the existing board reflects strong confidence over management’s strategies, which is expected to drive share price in the near term. Nevertheless, we expect investments in new initiatives will continue to weigh on the company’s bottom-line results. Further, increasing competition is a major headwind.”
  • 1/4/2018 – Automatic Data Processing was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “ADP is a provider of human capital management solutions and integrated computing solutions to vehicle dealers. We note that the stock has outperformed the industry over the past one year. The company also raised fiscal 2018 guidance for revenues and earnings. We note that ADP holds a dominant position in the payroll processing and human capital management (HCM) market, primarily owing to its robust product portfolio. Moreover, activist investor Bill Ackman recently failed to get a position in the company's board. The overwhelming shareholder support for the existing board reflects strong confidence over management’s strategies, which is expected to drive share price in the near term. Nevertheless, we expect investments in new initiatives will continue to weigh on the company’s bottom-line results. Further, increasing competition is a major headwind.”

Shares of Automatic Data Processing (NASDAQ ADP) opened at $111.65 on Tuesday. Automatic Data Processing has a fifty-two week low of $95.50 and a fifty-two week high of $125.24. The company has a current ratio of 1.06, a quick ratio of 1.06 and a debt-to-equity ratio of 0.51. The stock has a market capitalization of $49,490.00, a PE ratio of 28.92, a price-to-earnings-growth ratio of 2.43 and a beta of 0.86.

Automatic Data Processing (NASDAQ:ADP) last released its quarterly earnings results on Wednesday, January 31st. The business services provider reported $0.99 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.89 by $0.10. Automatic Data Processing had a return on equity of 43.28% and a net margin of 13.47%. The business had revenue of $3.24 billion during the quarter, compared to analyst estimates of $3.18 billion. During the same quarter in the previous year, the company posted $0.87 earnings per share. Automatic Data Processing’s revenue for the quarter was up 8.3% on a year-over-year basis. equities research analysts expect that Automatic Data Processing will post 4.17 EPS for the current fiscal year.

The business also recently declared a quarterly dividend, which will be paid on Sunday, April 1st. Shareholders of record on Friday, March 9th will be issued a dividend of $0.63 per share. This represents a $2.52 annualized dividend and a yield of 2.26%. The ex-dividend date is Thursday, March 8th. Automatic Data Processing’s dividend payout ratio is presently 65.28%.

In other news, insider Michael A. Bonarti sold 3,900 shares of the company’s stock in a transaction dated Tuesday, January 2nd. The stock was sold at an average price of $116.03, for a total value of $452,517.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, VP Stuart Sackman sold 238 shares of the company’s stock in a transaction dated Monday, January 22nd. The stock was sold at an average price of $121.65, for a total value of $28,952.70. Following the completion of the transaction, the vice president now directly owns 18,676 shares of the company’s stock, valued at approximately $2,271,935.40. The disclosure for this sale can be found here. Insiders have sold 149,767 shares of company stock valued at $17,801,722 in the last three months. 0.25% of the stock is currently owned by corporate insiders.

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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