Automatic Data Processing is set to report second-quarter fiscal 2026 results with consensus estimates pegging revenue at $5.4 billion and adjusted earnings per share of $2.58. This would represent top-line growth of roughly 4.2% year-over-year, driven by continued momentum in both Employer Services and the Professional Employer Organization units. Investors will be watching payroll processing volumes, which have increased by 3.5% in the first half, and the company’s margin outlook, with analysts expecting an operating profit margin near 24% for the period.

In the first quarter, Employer Services revenue rose 6.8% to $3.7 billion, while PEO services grew 5.5% to $1.1 billion. Management has reaffirmed full-year 2026 adjusted EPS guidance of $10.81 to $11.01, implying year-over-year growth of approximately 4%. The company also reiterated its outlook for mid-single-digit constant-dollar revenue growth, underpinned by new business wins that added 45,000 payroll client worksite employees in Q1 and an estimated 7.4% annual increase in retirement services engagements.

Thirteen research firms currently cover ADP, with an average rating of Hold. Two analysts recommend Buy, nine rate it Hold, and two rate it Sell. The average 12-month target price stands at $306.42, implying potential upside of about 18% from current levels. On January 14, the board authorized a $6 billion share repurchase plan, representing up to 5.8% of outstanding shares. ADP also declared a quarterly dividend of $1.70 per share, yielding approximately 2.6% annually and reflecting a 67% payout ratio, underscoring the company’s commitment to returning cash to shareholders.