California State Teachers Retirement System 13F: Cuts ADP Stake by $3.5M

California State Teachers Retirement System (CalSTRS) recently lowered its investment in Automatic Data Processing, Inc. (ADP). According to its latest 13F filing with the SEC, the pension fund sold 15,681 shares during the quarter, representing a 2.4% reduction in its total holdings. This move left the fund with 633,103 shares of the payroll and human resources company, a position worth approximately $140.8 million at the end of the reporting period.

CalSTRS Adjusts Its ADP Portfolio

This latest trim by CalSTRS brings its total ownership from 648,784 shares down to the current 633,103 shares. The pension fund has been active in adjusting its technology and services portfolio recently, including a similar 2.6% reduction in its stake in Astera Labs on May 18. This filing reflects holdings as of the end of the reporting period and doesn't necessarily show exactly what the fund owns today, as 13F reports are backward-looking by nature.

Institutional Activity in ADP

CalSTRS isn't the only large institution making changes to its ADP position this season. Other major players have also been paring back their exposure to the human capital management firm. For instance, Blackrock, Inc. recently cut its position by more than 1 million shares, though it remains a massive holder with about 35.5 million shares. Mitsubishi Ufj Asset Management also reduced its stake by a substantial 65%, bringing its total to 1.02 million shares. Additionally, Lido Advisors trimmed its holdings by 25.5%, further reflecting a trend of institutional selling among some of the company's significant investors.

Automatic Data Processing Stock Performance

On Saturday, shares of Automatic Data Processing were priced at $222.46. The stock has seen a wide range over the past year, hitting a high of $294.35 and a low of $188.16. Currently, the stock is trading below its 50-day moving average of $268.96 and its 200-day moving average of $237.93. With a price-to-earnings ratio of 24.7, the company is valued at roughly 24 times its trailing earnings. Investors often look at these moving averages to see if a stock's recent trend is gaining or losing momentum.

Revenue and Earnings Trends

In its most recent financial reports, ADP showed revenue of $21.95 billion, which is a 6.8% increase compared to the prior year. The company is quite profitable, maintaining a net margin of 20.1% and a return on equity of 72.2%. ADP reported earnings per share of $10.93 for the period. Looking ahead, shareholders are watching for the next earnings announcement, which is scheduled for October 28, 2026.

Dividend Payouts for Shareholders

ADP continues to be a reliable source of income for dividend investors. The company pays an annual dividend rate of $6.80 per share, which works out to a dividend yield of 2.51%. Management is currently using about 60.7% of the company's earnings to cover these dividend payments, a level often seen as sustainable for mature companies in the software and services sector.

Analysts Set New Price Targets

Wall Street analysts have been busy updating their views on ADP throughout the summer. On August 5, 2026, Cantor Fitzgerald reiterated an Overweight rating with a $310.00 price target. Earlier, on July 30, several other firms adjusted their targets following financial updates. Guggenheim maintained a Buy rating and raised its target to $300.00, while Citigroup kept a Neutral rating but significantly increased its price target from $230.00 to $287.00. Morgan Stanley and Wells Fargo both maintain neutral-equivalent ratings with targets of $286.00 and $283.00, respectively. Currently, the average price target among 15 analysts is $287.60.

Cloud-Based HR Solutions

Automatic Data Processing is a global leader in human capital management, providing the software that businesses use to handle payroll, taxes, and employee benefits. It serves everyone from small local shops using its RUN platform to massive corporations through its Workforce Now and Lyric systems. Because nearly every business needs help managing its workforce and staying compliant with labor laws, ADP is often viewed as a bellwether for the broader job market.

Looking Forward

Investors will likely keep a close eye on whether other large pension funds follow the lead of CalSTRS in trimming their stakes. The next major catalyst for the stock will be the earnings report in late October. It is important to remember that 13F filings like this one provide a snapshot of the past and may not reflect any trades the fund has made in the weeks since the quarter ended.