For the second quarter of fiscal 2026 Automatic Data Processing is expected to deliver revenues of approximately $5.4 billion and earnings per share of $2.58, supported by steady expansion in its Employer Services unit—projected to grow mid-single digits year-over-year—and continued momentum in its Professional Employer Organization (PEO) division, which analysts forecast will increase revenue by roughly 8% compared with the prior year period.

In the quarter ended September 30, the company reported adjusted EPS of $2.49, topping the consensus estimate of $2.44, and generated revenue of $5.18 billion, up 7.1% from a year earlier. Profit margin remained strong at 19.8%, and return on equity was 70.6%. Management has set full-year fiscal 2026 EPS guidance in the range of $10.811 to $11.011 and analysts on average are modeling roughly $9.93 for the current year, reflecting confidence in sustained margin expansion and cross-sell opportunities in its HCM suite.

The board has authorized a share repurchase program of up to $6 billion, representing about 5.8% of outstanding stock, signaling management’s view that the shares remain undervalued. In addition, the company declared a quarterly dividend of $1.70 per share, translating to an annualized payout of $6.80 and a dividend yield near 2.6%, with a payout ratio of approximately 67.1%.

Thirteen research firms covering the company assign an average rating of Hold, with two Sell recommendations, nine Holds and two Buys, and an average 12-month target price of $306.42. Recent revisions include price objectives cut by JPMorgan Chase to $295 and by Wells Fargo to $272, while Citigroup maintains a neutral stance at $303 and Jefferies an underperform rating at $230. Insiders sold 2,249 shares valued at $589,852 over the last three months, reducing insider ownership to 0.20%, and institutional investors now control roughly 80.0% of shares outstanding.