Analyst Upgrades Automatic Data Processing (ADP) to ‘Equal Weight’, Assigns $214 Price Target

Automatic Data Processing, Inc. (NASDAQ:ADP) is simply a broad planetary supplier of cloud-based quality superior absorption (HCM) solutions that unite HR, payroll, talent, time, taxation and benefits administration, and is simply a person successful concern outsourcing services, analytics, and compliance expertise.

On May 18, Wells Fargo upgraded Automatic Data Processing, Inc. (NASDAQ:ADP) from ‘Underweight’ to ‘Equal Weight’, portion assigning the banal a terms people of $214.

Wells Fargo believes that ADP offers a amended risk/reward illustration astatine existent levels, fixed the “modest improvement” successful the company’s fundamentals and its year-to-date stock terms weakness. The expert steadfast is of the presumption that portion the caller concerns surrounding AI “are not wholly unfounded, they are apt overdone”.

Automatic Data Processing, Inc. (NASDAQ:ADP) posted beardown results for its Q3 2026 past month, exceeding estimates successful some profits and revenue. The institution delivered 7% gross growth, 80 ground points of adjusted EBIT borderline expansion, and 10% adjusted EPS maturation compared to the year-ago period.

Moreover, ADP raised its guidance for FY 2026. The institution present expects its adjusted EPS to emergence by 10%-11%, compared to its anterior outlook for a 9%-10% growth. Its consolidated gross maturation outlook besides present stands astatine 6% to 7%, from astir 6% previously. Additionally, the institution present expects full-year EBIT borderline enlargement of 70-80 ground points, versus its anterior scope of 50-70 bps.

Matrix Asset Advisors, an plus absorption company, stated the pursuing regarding Automatic Data Processing, Inc. (NASDAQ:ADP) successful its Q1 2026 investor letter:

“During the quarter, we started caller partial positions successful Automatic Data Processing, Inc. (NASDAQ:ADP) and Procter & Gamble. Automatic Data Processing (ADP) is simply a person successful the concern of administering payroll, radical wellness insurance, concern insurance, workers’ comp plans, status plans, and compliance for ample and tiny businesses. These administrative functions are captious to a business’s operations, and the institution has a precise precocious lawsuit retention rate. The company’s banal terms has declined astir 30% implicit the past twelvemonth connected concerns that artificial quality volition disrupt its concern and a slowing labour market. ADP has a agelong past of expanding net and dividends. At our archetypal acquisition terms of astir $215, the shares were trading astatine the little extremity of their historical P/E multiple, 18x guardant earnings, and astatine the higher extremity of their dividend output astatine 3.2%. ADP has accrued its dividend for implicit 50 consecutive years. We judge the stock terms volition rebound powerfully erstwhile the institution demonstrates that the fears astir AI’s disruption to its concern are exaggerated.”