Automatic Data Processing (ADP) Downgraded by Zacks Investment Research to “Hold”

Automatic Data Processing (NASDAQ:ADP) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Wednesday.

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.”

A number of other research firms have also commented on ADP. BidaskClub raised shares of Automatic Data Processing from a “hold” rating to a “buy” rating in a research note on Thursday, September 28th. BMO Capital Markets decreased their price objective on shares of Automatic Data Processing from $122.00 to $114.00 and set an “outperform” rating for the company in a research note on Friday, November 3rd. Bank of America raised their price objective on shares of Automatic Data Processing from $111.00 to $114.00 and gave the stock a “neutral” rating in a research note on Friday, October 13th. Morgan Stanley raised shares of Automatic Data Processing from an “underweight” rating to an “equal” rating and set a $114.00 price objective for the company in a research note on Tuesday, November 14th. Finally, Royal Bank of Canada decreased their price objective on shares of Automatic Data Processing from $100.00 to $95.00 and set a “sector perform” rating for the company in a research note on Monday, November 6th. Twelve equities research analysts have rated the stock with a hold rating and five have given a buy rating to the company. Automatic Data Processing currently has a consensus rating of “Hold” and an average target price of $114.64.

Shares of Automatic Data Processing (NASDAQ:ADP) traded up $0.82 during trading hours on Wednesday, reaching $118.76. 2,317,300 shares of the company were exchanged, compared to its average volume of 1,943,883. The company has a market capitalization of $52,160.00, a PE ratio of 30.14, a price-to-earnings-growth ratio of 2.93 and a beta of 0.85. Automatic Data Processing has a 1 year low of $94.11 and a 1 year high of $121.77. The company has a quick ratio of 1.10, a current ratio of 1.10 and a debt-to-equity ratio of 0.51.

Automatic Data Processing (NASDAQ:ADP) last posted its quarterly earnings data on Thursday, November 2nd. The business services provider reported $0.91 EPS for the quarter, topping analysts’ consensus estimates of $0.85 by $0.06. Automatic Data Processing had a net margin of 14.08% and a return on equity of 42.34%. The firm had revenue of $3.08 billion during the quarter, compared to analyst estimates of $3.06 billion. During the same quarter last year, the business posted $0.86 EPS. The company’s revenue was up 5.6% on a year-over-year basis. research analysts predict that Automatic Data Processing will post 3.91 earnings per share for the current fiscal year.

In other news, CEO Carlos A. Rodriguez sold 95,756 shares of the firm’s stock in a transaction on Thursday, January 4th. The shares were sold at an average price of $118.09, for a total transaction of $11,307,826.04. Following the transaction, the chief executive officer now owns 124,722 shares in the company, valued at approximately $14,728,420.98. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Edward B. Flynn III sold 7,886 shares of the firm’s stock in a transaction on Tuesday, January 9th. The shares were sold at an average price of $117.74, for a total transaction of $928,497.64. Following the transaction, the insider now owns 40,522 shares in the company, valued at approximately $4,771,060.28. The disclosure for this sale can be found here. In the last quarter, insiders sold 115,505 shares of company stock valued at $13,612,788. Insiders own 0.25% of the company’s stock.

Several institutional investors have recently added to or reduced their stakes in ADP. Gillespie Robinson & Grimm Inc. bought a new position in Automatic Data Processing in the 4th quarter worth $328,000. Park National Corp OH raised its holdings in Automatic Data Processing by 0.8% in the 4th quarter. Park National Corp OH now owns 358,012 shares of the business services provider’s stock worth $41,956,000 after acquiring an additional 2,898 shares during the period. Prudential Financial Inc. raised its holdings in Automatic Data Processing by 0.4% in the 3rd quarter. Prudential Financial Inc. now owns 629,708 shares of the business services provider’s stock worth $68,840,000 after acquiring an additional 2,420 shares during the period. AustralianSuper Pty Ltd bought a new position in Automatic Data Processing in the 3rd quarter worth $25,253,000. Finally, Steward Partners Investment Advisory LLC bought a new position in Automatic Data Processing in the 3rd quarter worth $1,880,000. Institutional investors and hedge funds own 78.67% of the company’s stock.

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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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