Automatic Data Processing (NASDAQ:ADP) Sets New 12-Month High – Still a Buy?

Automatic Data Processing, Inc. (NASDAQ:ADP) shares reached a new 52-week high during trading on Thursday. The company traded as high as $310.98 and last traded at $306.0270, with a volume of 767,341 shares changing hands. The stock had previously closed at $303.54.

Automatic Data Processing News Roundup

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

• Positive Sentiment: ADP’s October National Employment Report showed private employers added 86,000 jobs, above the 69,000 forecast. Broad-based hiring and rising pay point to continued employer activity, which may support demand for ADP’s payroll and HR services. October ADP jobs report
• Positive Sentiment: The company’s latest reported quarter also showed momentum: ADP beat analyst estimates for earnings and revenue, with revenue up 6.1% year over year. ADP fair-value and results article
• Neutral Sentiment: ADP’s announcement of finalists for its 2027 HCM Distinction Awards highlights its human-capital-management business but does not indicate a material financial change. HCM Distinction Award finalists
• Negative Sentiment: A valuation article points to a 13% fair-value gap, raising the possibility that shares are priced above estimated value. A separate cash-flow-focused article also examines whether the stock’s valuation is justified, adding a potential constraint on further gains. Fair-value analysis Cash-flow valuation analysis
• Negative Sentiment: ADP VP Michael Bonarti sold 7,487 shares for about $2.25 million. The sale was made under a pre-arranged Rule 10b5-1 plan and he retained 81,849 shares, which may lessen—but does not eliminate—the negative sentiment from insider selling. Insider sale report

Analyst Ratings Changes

Several research analysts have recently weighed in on ADP shares. Royal Bank Of Canada reaffirmed a “sector perform” rating and issued a $290.00 price target on shares of Automatic Data Processing in a report on Thursday, October 29th. Wells Fargo & Company lifted their price objective on Automatic Data Processing from $248.00 to $283.00 and gave the company an “equal weight” rating in a research note on Thursday, July 30th. Morgan Stanley boosted their target price on Automatic Data Processing from $286.00 to $288.00 and gave the stock an “equal weight” rating in a research report on Thursday, October 29th. UBS Group upped their target price on Automatic Data Processing from $260.00 to $270.00 and gave the stock a “neutral” rating in a research note on Wednesday, July 22nd. Finally, BMO Capital Markets raised their price target on Automatic Data Processing from $248.00 to $305.00 and gave the company a “market perform” rating in a report on Wednesday, July 29th. Three equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat, Automatic Data Processing has an average rating of “Hold” and an average target price of $285.00.

Automatic Data Processing Stock Up 0.9%

The stock’s fifty day moving average price is $278.29 and its 200 day moving average price is $241.44. The stock has a market cap of $120.96 billion, a P/E ratio of 27.13, a price-to-earnings-growth ratio of 2.66 and a beta of 0.77. The company has a current ratio of 1.03, a quick ratio of 1.05 and a debt-to-equity ratio of 0.98.

Automatic Data Processing (NASDAQ:ADP) last posted its quarterly earnings data on Wednesday, October 28th. The business services provider reported $2.82 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.77 by $0.05. Automatic Data Processing had a net margin of 20.33% and a return on equity of 77.01%. The company had revenue of $5.49 billion during the quarter, compared to the consensus estimate of $5.48 billion. During the same period in the previous year, the firm posted $2.49 EPS. The firm’s revenue was up 6.1% compared to the same quarter last year. As a group, research analysts forecast that Automatic Data Processing, Inc. will post 12.38 earnings per share for the current fiscal year.

Insider Activity

In other Automatic Data Processing news, VP Virginia Magliulo sold 2,927 shares of Automatic Data Processing stock in a transaction dated Friday, October 30th. The stock was sold at an average price of $293.70, for a total transaction of $859,659.90. Following the completion of the sale, the vice president owned 14,865 shares of the company’s stock, valued at $4,365,850.50. The trade was a 16.45% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Joseph Desilva sold 631 shares of the company’s stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $282.87, for a total value of $178,490.97. Following the completion of the transaction, the vice president owned 18,824 shares of the company’s stock, valued at $5,324,744.88. The trade was a 3.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 41,773 shares of company stock valued at $11,915,182. 0.15% of the stock is owned by insiders.

Institutional Trading of Automatic Data Processing

Several hedge funds and other institutional investors have recently bought and sold shares of the company. BlackRock Inc. purchased a new position in Automatic Data Processing in the 2nd quarter worth $8,097,229,000. Bank of America Corp DE purchased a new stake in Automatic Data Processing during the second quarter valued at about $1,231,175,000. Deutsche Bank AG purchased a new stake in Automatic Data Processing during the second quarter valued at about $994,937,000. Bank of New York Mellon Corp purchased a new stake in Automatic Data Processing during the second quarter valued at about $725,513,000. Finally, Legal & General Group Plc bought a new position in shares of Automatic Data Processing during the second quarter valued at about $562,425,000. Hedge funds and other institutional investors own 80.03% of the company’s stock.

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.