Automatic Data Processing (NASDAQ:ADP) Sets New 12-Month High – What’s Next?

Automatic Data Processing, Inc. (NASDAQ:ADP) 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 trading hands. The stock had previously closed at $303.54.

More Automatic Data Processing News

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

• Positive Sentiment: ADP’s October employment report showed private employers added 86,000 jobs, above expectations of 69,000. Continued hiring could support demand for ADP’s payroll and human-resources services. October private-sector hiring report
• Neutral Sentiment: Three ADP vice presidents—Michael Bonarti, Virginia Magliulo and Jonathan Lehberger—reported share sales. Each transaction was made under a pre-arranged Rule 10b5-1 plan, so the sales are not necessarily a signal about their outlook for the company. SEC filing for Bonarti sale SEC filing for Magliulo sale SEC filing for Lehberger sale
• Negative Sentiment: Recent valuation commentary argues ADP may be priced above estimated fair value, including one analysis identifying a potential 13% gap. Such concerns could temper demand for the shares, particularly after a strong run-up. ADP fair-value analysis ADP cash-flow valuation analysis

Analysts Set New Price Targets

Several brokerages recently weighed in on ADP. Jefferies Financial Group increased their price target on Automatic Data Processing from $225.00 to $250.00 and gave the stock an “underperform” rating in a report on Wednesday, October 28th. Guggenheim restated a “buy” rating and issued a $340.00 target price on shares of Automatic Data Processing in a research note on Thursday, October 29th. Cantor Fitzgerald lifted their target price on shares of Automatic Data Processing from $310.00 to $336.00 and gave the company an “overweight” rating in a report on Friday, October 30th. Citigroup boosted their price target on shares of Automatic Data Processing from $287.00 to $295.00 and gave the stock a “neutral” rating in a research note on Thursday, October 29th. Finally, Weiss Ratings raised Automatic Data Processing from a “hold (c)” rating to a “hold (c+)” rating in a report on Tuesday, September 22nd. Three investment analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, Automatic Data Processing currently has a consensus rating of “Hold” and a consensus target price of $285.00.

Automatic Data Processing Stock Performance

The company has a current ratio of 1.03, a quick ratio of 1.05 and a debt-to-equity ratio of 0.98. The firm has a market capitalization of $119.75 billion, a price-to-earnings ratio of 26.89, a PEG ratio of 2.68 and a beta of 0.77. The stock’s 50 day moving average price is $279.18 and its two-hundred day moving average price is $241.91.

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. Automatic Data Processing had a return on equity of 77.01% and a net margin of 20.33%. The company had revenue of $5.49 billion for the quarter, compared to the consensus estimate of $5.48 billion. During the same period in the previous year, the business earned $2.49 earnings per share. Automatic Data Processing’s quarterly revenue was up 6.1% compared to the same quarter last year. On average, analysts forecast that Automatic Data Processing, Inc. will post 12.38 EPS for the current year.

Insider Buying and Selling

In other news, VP Virginia Magliulo sold 2,927 shares of the company’s stock in a transaction on Friday, October 30th. The shares were sold at an average price of $293.70, for a total value of $859,659.90. Following the completion of the transaction, the vice president directly owned 14,865 shares in the company, valued at approximately $4,365,850.50. This represents a 16.45% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Michael Bonarti sold 7,487 shares of Automatic Data Processing stock in a transaction that occurred on Monday, November 2nd. The stock was sold at an average price of $300.00, for a total value of $2,246,100.00. Following the sale, the vice president owned 81,849 shares in the company, valued at $24,554,700. This represents a 8.38% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 50,207 shares of company stock valued at $14,522,300 over the last ninety days. Insiders own 0.15% of the company’s stock.

Institutional Trading of Automatic Data Processing

Several hedge funds and other institutional investors have recently bought and sold shares of ADP. Northwestern Mutual Wealth Management Co. bought a new position in Automatic Data Processing during the 2nd quarter worth $13,283,000. Royal Capital Wealth Management LLC bought a new position in Automatic Data Processing in the 2nd quarter worth about $1,226,000. Canada Pension Plan Investment Board bought a new stake in Automatic Data Processing during the 2nd quarter valued at $152,706,000. Murphy Pohlad Asset Management LLC acquired a new stake in Automatic Data Processing in the second quarter worth about $1,044,000. Finally, Fulton Bank N.A. increased its stake in Automatic Data Processing by 192.0% during the 2nd quarter. Fulton Bank N.A. now owns 7,165 shares of the business services provider’s stock valued at $1,605,000 after buying an additional 4,711 shares during the period. 80.03% of the stock is owned by institutional investors.

About Automatic Data Processing

Automatic Data Processing, Inc (ADP) provides payroll processing and human resources technology and services to businesses of varying sizes. Its offerings include payroll administration, tax filing, benefits administration, workforce management, talent management, and human capital management software.

ADP also provides services such as compliance support and professional employer organization solutions, which help businesses manage employment responsibilities. Its products combine software with payroll and HR services to support organizations’ workforce operations.

Founded in 1949 as Automatic Payrolls, Inc, the company has grown from a payroll-processing business into a global provider of HR and workforce solutions.