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• ADP 0% Rate It

Business outsourcing giant Automatic Data Processing ( ADP ) on Wednesday received a big downgrade from analysts at Jefferies & Co.

The firm cut its rating on ADP from "Hold" to "Underperform" with a $55 price target. That target implies a 6.5% downside to the stock's Tuesday closing price of $58.84.

A Jefferies analyst commented, "We've been cautious for awhile on ADP / Paychex (Nasdaq: PAYX); now we think it's time to sell the stocks. We downgrade both to Underperform from Hold, as we believe employment markets remain challenged, the interest rate environment will be a lingering headwind, and remaining secular tailwind is quite limited. Against this tough fundamental backdrop, these stocks carry the highest PEG ratio among large-cap, dividend-paying tech names in the S&P500."

ADP shares fell 84 cents, or -1.4%, in premarket trading Wednesday.

The Bottom Line
Shares of Automatic Data Processing ( ADP ) have a 2.69% dividend yield, based on last night's closing stock price of $58.94. The stock has technical support in the $54-$56 price area. The stock is approaching the all-time high price range of $63-$65 a share.

Automatic Data Processing ( ADP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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