Automatic Data Processing is expected to report fiscal Q2 2026 revenues of approximately $5.4 billion, representing a 4.2 percent increase year-over-year, and adjusted EPS of $2.58. Growth in Employer Services—driven by new client wins and increased per-employee fees—should contribute roughly 3.5 percent revenue growth, while the Professional Employer Organization segment is projected to expand at a 12 percent annual rate. In the prior quarter, ADP delivered EPS of $2.49, beating consensus by $0.05, with revenues of $5.18 billion, $40 million above analysts’ estimates, a net margin of 19.79 percent and ROE of 70.63 percent. The company’s client retention rate remains above 95 percent, underlining recurring revenue strength.

Thirteen sell-side firms currently cover ADP, assigning an average rating of Hold. Of these, two have Sell ratings, nine are Hold, and two have Buy ratings. The mean 12-month price target stands at $306.42, reflecting upside potential of roughly 18 percent from current levels. Major brokerages including JPMorgan, Citigroup and Wells Fargo have revised their targets within a $272.00 to $340.00 range over the past quarter, citing cautious demand forecasts for mid-market customers and pressure on service-fee yields in the PEO business.

On January 14, the board authorized a $6 billion share repurchase program, representing up to 5.8 percent of shares outstanding. Insiders have reduced their stakes, with two vice presidents selling a combined 1,349 shares for $355,852 at average prices near $263.00. ADP continues to pay a quarterly dividend of $1.70 per share, equivalent to a 2.6 percent yield. Institutional ownership remains high at 80.03 percent, while insider ownership is 0.20 percent. Management’s 2026 guidance calls for full-year EPS between $10.811 and $11.011, supporting sustained free cash flow for buybacks and dividends.