Automatic Data Processing (NASDAQ:ADP) to Buyback $6.00 billion in Shares

Automatic Data Processing (NASDAQ:ADP) declared that its board has approved a share repurchase program on Wednesday, January 14th, RTT News reports. The company plans to buyback $6.00 billion in outstanding shares. This buyback authorization permits the business services provider to purchase up to 5.8% of its stock through open market purchases. Stock buyback programs are usually a sign that the company’s leadership believes its shares are undervalued.

Automatic Data Processing Stock Up 0.1%

Automatic Data Processing stock opened at $260.44 on Friday. The stock has a market cap of $105.33 billion, a PE ratio of 25.71 and a beta of 0.86. The company has a debt-to-equity ratio of 0.62, a current ratio of 1.05 and a quick ratio of 1.05. The stock’s fifty day moving average is $257.93 and its two-hundred day moving average is $281.56. Automatic Data Processing has a 1-year low of $247.18 and a 1-year high of $329.93.

Automatic Data Processing (NASDAQ:ADP) last released its quarterly earnings data on Wednesday, October 29th. The business services provider reported $2.49 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.44 by $0.05. Automatic Data Processing had a return on equity of 70.63% and a net margin of 19.79%.The business had revenue of $5.18 billion during the quarter, compared to analysts’ expectations of $5.14 billion. During the same period in the prior year, the firm posted $2.33 EPS. The business’s quarterly revenue was up 7.1% compared to the same quarter last year. Automatic Data Processing has set its FY 2026 guidance at 10.811-11.011 EPS. On average, sell-side analysts expect that Automatic Data Processing will post 9.93 EPS for the current fiscal year.

Automatic Data Processing Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, April 1st. Stockholders of record on Friday, March 13th will be given a dividend of $1.70 per share. This represents a $6.80 annualized dividend and a dividend yield of 2.6%. The ex-dividend date is Friday, March 13th. Automatic Data Processing’s payout ratio is currently 67.13%.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently weighed in on the company. JPMorgan Chase & Co. dropped their price objective on Automatic Data Processing from $340.00 to $295.00 and set an “underweight” rating for the company in a research note on Thursday, October 30th. Citigroup initiated coverage on Automatic Data Processing in a research report on Thursday, October 23rd. They issued a “neutral” rating and a $303.00 target price for the company. Wells Fargo & Company cut their price target on shares of Automatic Data Processing from $288.00 to $272.00 and set an “underweight” rating on the stock in a research note on Thursday, October 30th. Weiss Ratings reissued a “hold (c+)” rating on shares of Automatic Data Processing in a research note on Monday, December 29th. Finally, Jefferies Financial Group reissued an “underperform” rating and issued a $230.00 price target (down previously from $245.00) on shares of Automatic Data Processing in a research report on Tuesday, December 16th. Two analysts have rated the stock with a Buy rating, nine have given a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus price target of $306.42.

Insider Activity at Automatic Data Processing

In related news, VP Christopher D’ambrosio sold 543 shares of Automatic Data Processing stock in a transaction on Tuesday, January 13th. The shares were sold at an average price of $262.29, for a total transaction of $142,423.47. Following the sale, the vice president directly owned 9,998 shares in the company, valued at $2,622,375.42. This trade represents a 5.15% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, VP David Kwon sold 806 shares of the business’s stock in a transaction on Monday, January 12th. The shares were sold at an average price of $264.80, for a total transaction of $213,428.80. Following the completion of the sale, the vice president directly owned 11,187 shares of the company’s stock, valued at approximately $2,962,317.60. This trade represents a 6.72% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 2,249 shares of company stock valued at $589,852 in the last 90 days. Insiders own 0.20% of the company’s stock.

About Automatic Data Processing

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.