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Wells Fargo Cuts Price Target on Automatic Data Processing (ADP), Flags Multiple Compression

Automatic Data Processing, Inc. (NASDAQ:ADP) is included among the 14 Safest Stocks with Highest Dividends.

On March 27, Wells Fargo lowered its price recommendation on Automatic Data Processing, Inc. (NASDAQ:ADP) to $214 from $262. It reiterated an Underweight rating on the stock. The firm pointed to compression in comparable group multiples as the reason for the change.

During the fiscal Q2 2026 earnings call, Peter Hadley, the Chief Financial Officer, said the company was raising its fiscal 2026 consolidated revenue outlook to about 6% growth. He noted that the expectation for adjusted EBIT margin expansion remained unchanged at 50 to 70 basis points. He added that the company was also increasing its adjusted EPS growth forecast to between 9% and 10%, mentioning that share repurchases would help support this improvement.

The company also raised its Employer Services revenue growth outlook to roughly 6% for the full year. At the same time, it maintained its Professional Employer Organization revenue growth guidance in the 5% to 7% range. PEO revenue, excluding zero-margin pass-throughs, is expected to grow between 3% and 5%. Hadley said the effective tax rate is still expected to be around 23% for the year. He also reiterated that the company is keeping its guidance for new business bookings growth at 4% to 7% for fiscal 2026.

Automatic Data Processing, Inc. (NASDAQ:ADP) provides cloud-based human capital management (HCM) solutions. Its operations are organized into Employer Services and Professional Employer Organization segments.

While we acknowledge the risk and potential of ADP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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