Three Major Stocks Reveal Significant Buyback Increases Following Over 20% Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: Marketbeat
Large-Cap Stocks Buyback Announcements: Several large-cap stocks have announced significant buyback programs amid a decline of over 20% from their recent highs, suggesting management believes their shares are undervalued.
ADP's Performance and Challenges: ADP reported strong fiscal Q1 earnings but saw its shares drop nearly 7% following the announcement, indicating concerns about a weak hiring environment despite beating sales estimates.
Costar's Competitive Moves: Costar Group is actively challenging Zillow's dominance in the residential real estate market by investing heavily in AI tools and announcing a substantial share buyback program, signaling management's confidence in the stock.
Paychex's Strategic Buyback: Paychex has initiated a $1 billion share repurchase program, reflecting management's belief in the stock's value, while also facing pressures from hiring market uncertainties that have affected its stock performance.
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Analyst Views on ADP
Wall Street analysts forecast ADP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ADP is 290.27 USD with a low forecast of 230.00 USD and a high forecast of 332.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
1 Buy
7 Hold
3 Sell
Hold
Current: 250.690
Low
230.00
Averages
290.27
High
332.00
Current: 250.690
Low
230.00
Averages
290.27
High
332.00
About ADP
Automatic Data Processing, Inc. is a provider of cloud-based human capital management (HCM) solutions. Its segments include Employer Services and Professional Employer Organization (PEO). Its Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees around the world, offering a range of technology-based HCM solutions, including its cloud-based platforms, and human resource outsourcing (HRO) (other than PEO) solutions. Its offerings include Payroll Services, Benefits Administration, Talent Management, HR Management, Workforce Management, Compliance Services, Insurance Services and Retirement Services. Its PEO business, called ADP TotalSource, provides clients with guidance, technology, comprehensive employee benefits, risk management, safety, and workers’ compensation program. Its compensation management software supports the compensation planning needs.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ADP Set to Announce Q2 Earnings on January 28
- Earnings Announcement Date: Automatic Data Processing (ADP) is set to release its Q2 earnings on January 28 before market open, with consensus EPS estimate at $2.57, reflecting a 9.4% year-over-year growth, indicating sustained profitability.
- Revenue Expectations: The revenue estimate stands at $5.34 billion, representing a 6.8% year-over-year increase, showcasing the company's robust performance and ongoing customer demand in the market.
- Historical Performance: Over the past two years, ADP has consistently beaten both EPS and revenue estimates 100% of the time, highlighting the company's reliability and consistency in financial performance, which boosts investor confidence.
- Estimate Revisions: In the last three months, EPS estimates have seen three upward revisions and eight downward adjustments, while revenue estimates experienced four upward revisions and seven downward changes, indicating market uncertainty and differing opinions on ADP's future performance.
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ADP Reports Strong Q2 Results Exceeding Expectations
- Revenue Growth: ADP's Q2 revenue reached $5.36 billion, surpassing analyst expectations of $5.34 billion with a year-over-year increase of 6%, indicating strong market performance and sustained client demand.
- Profitability Improvement: Adjusted EBIT rose 10% to $1.4 billion, with EBIT margin increasing by 80 basis points to 26.0%, reflecting the company's success in cost control and service efficiency.
- Segment Performance: Revenues from Employer Services and PEO Services both grew by 6%, reaching $3.61 billion and $1.76 billion respectively, demonstrating ADP's stable growth and competitive position in its core business areas.
- Outlook Adjustment: ADP raised its FY26 revenue growth outlook to 6%, expecting to reach $21.8 billion, with adjusted EPS growth projected at 9%-10%, showcasing the company's confidence in future performance and proactive market strategies.
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