What You Need to Know Ahead of Automatic Data Processing’s Earnings Release

Core Insights - Automatic Data Processing, Inc. (ADP) has a market capitalization of $102.3 billion and provides cloud-based human capital management (HCM) and business outsourcing solutions to help organizations manage their workforce efficiently [1] Financial Performance - ADP is expected to announce its second-quarter results on January 28, with analysts predicting an adjusted profit of $2.58 per share, reflecting a 9.8% increase from $2.35 per share in the same quarter last year [2] - For FY2026, ADP's adjusted EPS is projected to be $10.93, a 9.2% increase from $10.01 in 2025, and is expected to rise further to $11.95 per share in fiscal 2027, marking a 9.3% year-over-year growth [3] Stock Performance - Over the past 52 weeks, ADP's stock price has decreased by 9.4%, significantly underperforming the Technology Select Sector SPDR Fund's (XLK) 25.3% increase and the S&P 500 Index's 17.1% returns [4] - The underperformance is attributed to ADP's defensive, slower-growth profile during a period when investors have favored higher-beta, faster-growing technology and AI-linked stocks [5] Analyst Ratings - Analysts maintain a consensus "Hold" rating for ADP, with 17 analysts covering the stock, including two "Strong Buys," 13 "Holds," one "Moderate Sell," and one "Strong Sell" [6] - The mean price target for ADP is $290.93, indicating an 11.4% upside potential from current price levels [6]