Automatic Data Processing (NASDAQ:ADP) Reaches New 1-Year Low After Analyst Downgrade

Automatic Data Processing, Inc. (NASDAQ:ADP) reached a new 52-week low during trading on Thursday after Morgan Stanley lowered their price target on the stock from $311.00 to $274.00. Morgan Stanley currently has an equal weight rating on the stock. Automatic Data Processing traded as low as $246.72 and last traded at $247.6770, with a volume of 994245 shares traded. The stock had previously closed at $250.69.

Several other equities research analysts have also recently commented on the company. Jefferies Financial Group restated an “underperform” rating and issued a $230.00 target price (down previously from $245.00) on shares of Automatic Data Processing in a research note on Tuesday, December 16th. JPMorgan Chase & Co. cut their price objective on shares of Automatic Data Processing from $295.00 to $275.00 and set an “underweight” rating on the stock in a research report on Thursday. Stifel Nicolaus reduced their target price on shares of Automatic Data Processing from $290.00 to $280.00 and set a “hold” rating for the company in a report on Thursday. Wells Fargo & Company lowered their price target on shares of Automatic Data Processing from $272.00 to $262.00 and set an “underweight” rating on the stock in a research note on Thursday. Finally, Citigroup reduced their price objective on shares of Automatic Data Processing from $303.00 to $265.00 and set a “neutral” rating for the company in a research note on Thursday. Three analysts have rated the stock with a Buy rating, nine have issued a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus target price of $295.38.

Insider Activity

In related news, VP Christopher D’ambrosio sold 543 shares of Automatic Data Processing stock in a transaction dated Tuesday, January 13th. The stock was sold at an average price of $262.29, for a total transaction of $142,423.47. Following the completion of the transaction, the vice president owned 9,998 shares in the company, valued at approximately $2,622,375.42. This trade represents a 5.15% 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 David Kwon sold 900 shares of the company’s stock in a transaction that occurred on Tuesday, January 6th. The shares were sold at an average price of $260.00, for a total value of $234,000.00. Following the completion of the sale, the vice president owned 11,993 shares in the company, valued at $3,118,180. This represents a 6.98% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 2,249 shares of company stock worth $589,852 over the last 90 days. 0.20% of the stock is owned by company insiders.

Key Stories Impacting Automatic Data Processing

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

• Positive Sentiment: Q2 results beat expectations — EPS $2.62 vs. consensus ~$2.57 and revenue ~$5.36B, with revenue up ~6% YoY; management lifted revenue outlook. PR Newswire: ADP Q2 Results
• Positive Sentiment: Large $6 billion share buyback remains a near-term support catalyst by reducing share count and signaling management confidence. MarketBeat: Buyback Article
• Positive Sentiment: Product/innovation push — ADP launched new AI “ADP Assist” agents aimed at improving payroll/HR automation, which supports long-term revenue and margin expansion potential. PR Newswire: ADP AI Launch
• Neutral Sentiment: New coverage initiated at Cantor Fitzgerald — adds another sell-side voice but not yet a material catalyst. AmericanBankingNews: Coverage Initiated
• Negative Sentiment: Morgan Stanley lowered its price target from $311 to $274 and moved to an “equal weight” rating — one of several same‑day cuts pressuring the stock. Benzinga: Morgan Stanley PT Cut
• Negative Sentiment: Citigroup cut its target from $303 to $265 and set a “neutral” rating — another immediate headwind for sentiment. Benzinga: Citigroup PT Cut
• Negative Sentiment: JPMorgan trimmed its target from $295 to $275 and holds an “underweight” stance — contributing to the selloff. Benzinga: JPMorgan PT Cut
• Negative Sentiment: Wells Fargo reduced its target to $262 and kept an “underweight” rating. Benzinga: Wells Fargo PT Cut TickerReport: Wells Fargo Note
• Negative Sentiment: Stifel trimmed its target from $290 to $280 and moved to a “hold” — part of a cluster of downgrades weighing on investor outlook. Benzinga: Stifel PT Cut

Institutional Investors Weigh In On Automatic Data Processing

Hedge funds have recently added to or reduced their stakes in the business. Laurel Wealth Advisors LLC raised its position 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 during the period. Norges Bank bought a new stake in shares of Automatic Data Processing during the 2nd quarter worth about $696,841,000. Wellington Management Group LLP boosted its holdings in shares of Automatic Data Processing by 47.8% during the 3rd quarter. Wellington Management Group LLP now owns 6,830,294 shares of the business services provider’s stock worth $2,004,691,000 after buying an additional 2,208,927 shares during the period. Mitsubishi UFJ Asset Management Co. Ltd. grew its stake in Automatic Data Processing by 32.1% in the 3rd quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 3,273,700 shares of the business services provider’s stock valued at $960,831,000 after buying an additional 796,379 shares during the last quarter. Finally, Amundi raised its holdings in Automatic Data Processing by 24.9% in the 2nd quarter. Amundi now owns 3,109,120 shares of the business services provider’s stock valued at $948,549,000 after acquiring an additional 619,829 shares during the period. Institutional investors and hedge funds own 80.03% of the company’s stock.

Automatic Data Processing Price Performance

The stock has a market capitalization of $99.48 billion, a price-to-earnings ratio of 23.65 and a beta of 0.86. The company’s 50-day simple moving average is $258.49 and its 200-day simple moving average is $278.33. The company has a debt-to-equity ratio of 0.62, a current ratio of 1.03 and a quick ratio of 1.05.

Automatic Data Processing (NASDAQ:ADP) last posted its earnings results on Wednesday, January 28th. The business services provider reported $2.62 EPS for the quarter, beating the consensus estimate of $2.57 by $0.05. The company had revenue of $5.36 billion for the quarter, compared to the consensus estimate of $5.34 billion. Automatic Data Processing had a return on equity of 68.44% and a net margin of 19.96%.The firm’s revenue for the quarter was up 6.2% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.35 earnings per share. Automatic Data Processing has set its FY 2026 guidance at 10.091-11.011 EPS. Research analysts forecast that Automatic Data Processing, Inc. will post 9.93 earnings per share for the current fiscal year.

Automatic Data Processing Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, April 1st. Shareholders of record on Friday, March 13th will be given a dividend of $1.70 per share. The ex-dividend date is Friday, March 13th. This represents a $6.80 annualized dividend and a yield of 2.8%. Automatic Data Processing’s dividend payout ratio (DPR) is presently 67.13%.

Automatic Data Processing announced that its board has authorized a share buyback 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 reacquire up to 5.8% of its shares through open market purchases. Shares buyback programs are typically a sign that the company’s board believes its shares are undervalued.

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.