By Peet Serfontein & Motheo Tlhagale
Automatic Data Processing is a multinational provider of human capital management (HCM) solutions, offering cloud-based payroll, human resources, and workforce management services to businesses of all sizes. With operations in approximately 140 countries and a client base exceeding 1.1 million, ADP is one of the largest payroll and tax filing processors globally.
The company is well-positioned to maintain and grow its market share, supported by its scale, continued investment in digital transformation, and a strong reputation for reliability and compliance. Its diversified service offerings, from core payroll and tax solutions to advanced talent management and professional employer organisation (PEO) services, enables ADP to remain a trusted partner for employers navigating an increasingly complex regulatory and workforce environment.
Technically, the price is forming a rising wedge pattern, which may present a promising investment opportunity (see the black converging trendlines on the main chart). Rising wedges are typically approached with caution, as they can signal either a continuation of the trend or a potential reversal.
However, the price appears to be rebounding from its 200-day simple moving average (SMA), reinforcing the bullish outlook for the stock. Additionally, the fading downside momentum, as shown by the MACD histogram, further supports this positive view.
Relative Strength Index (RSI) forward calculations suggest that the share will be in overbought territory at $385, which classifies our profit target of $336 as realistic.
We suggest a medium capital at-risk allocation for this trade.
| Share Information | |
|---|---|
| Share Code | ADP |
| Industry | Commercial & Professional Services |
| Market Capital (USD) | 125.28 billion |
| One Year Total Return | 22.23% |
| Return Year-to-Date | 6.52% |
| Current Price (USD) | 308.64 |
| 52 Week High (USD) | 329.93 |
| 52 Week Low (USD) | 255.97 |
| Financial Year End | June |
| The share price is up year-to-date. With a beta of 0.77 we expect lower volatility compared to the market. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 11.72 | 12.26 | 13.27 | 14.46 |
| Growth (%) | 4.63 | 8.21 | 8.97 | |
| Dividend Per Share (USD) | 6.78 | 7.17 | 7.62 | 8.20 |
| Growth (%) | 5.72 | 6.26 | 7.71 | |
| Forward PE (times) | 24.40 | 22.54 | 20.69 | |
| Forward Dividend Yield (%) | 2.40 | 2.55 | 2.74 | |
| The group remains well positioned to deliver decent growth over the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long-term Fundamental view
| Share Name and Position | CMG - Stop (Close the position) |
BKR - Take profit (Close the position) |
MCD - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 54.65 | 40.11 | 299.17 |
| Current Price | 45.74 | 45.72 | 302.67 |
| Movement | -16.3% | +14.0% | +1.2% |
| Comment | The stock price hit our stop-loss level, prompting us to exit the position. | The stock price has reached our profit target, prompting us to close the position. | The price remains within a well-defined inclining channel and is now testing the 200-day SMA. Fading downside momentum supports a bullish view. Our profit target is held at $331, with a trailing stop at $290. |
| Time to exit | - | - | 1 October 2025 |
| Share Name and Position | FTNT - Buy (Continue to hold) |
ETN - Buy (Continue to hold) |
MET - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 104.93 | 334.86 | 79.32 |
| Current Price | 104.77 | 390.01 | 77.68 |
| Movement | -0.2% | +16.5% | -2.1% |
| Comment | An Elliott Wave five structure remains in focus, with the price holding above the 200-day SMA. Fading downside momentum supports a bullish bias. Our profit target is held at $120, with stop-losses at $99 and $99.50. | The price appears to be in Wave B under Elliott Wave theory, holding well above the 200-day SMA. Stalled upside momentum remains a concern. Our profit target is held at $395, with a trailing stop at $366. | A rising wedge below the 200-day SMA reinforces the counter-trend nature of the setup. Fading upside momentum is a concern. Our profit target is held at $89, with a stop set at $74. |
| Time to exit | 7 October 2025 | 28 April 2026 | 29 August 2025 |
| Share Name and Position | ABBV - Buy (Continue to hold) |
MSI - Buy (Continue to hold) |
|---|---|---|
| Entry | 185.72 | 422.93 |
| Current Price | 191.22 | 433.95 |
| Movement | +3.0% | +2.6% |
| Comment | The price is in an upward-sloping channel, continuing to test the 200-day SMA, framing this as a counter-trend setup. Emerging upside momentum supports the strategy. Our profit target is held at $216, with a stop set at $174. | The price appears to be initiating Wave five under Elliott Wave theory, trading just below the 200-day SMA, reinforcing the counter-trend nature of the setup. Upside momentum supports the strategy. Our profit target is held at $476, with a stop-loss at $402 and trailing stop at $406. |
| Time to exit | 20 August 2025 | 13 August 2025 |
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