Automatic Data Processing (ADP) is expected to post a modest fiscal Q4 beat and issue 2027 guidance in line with Wall Street's consensus, RBC Capital Markets said Monday in a report.

Q4 projections are supported by stable client retention, 1% growth in revenue per payroll run, and bookings growth in the upper half of the company's 4% to 7% guidance range, RBC said.

ADP is expected to report revenue of $5.46 billion, above the $5.44 billion consensus, while earnings per share are expected to reach $2.62, ahead of the $2.59 estimate, RBC said.

"This outlook reflects favorable year-over-year comparisons, a solid pipeline, and broad-based momentum across the business," the report said.

In fiscal 2027, ADP's revenue growth guidance is expected at 5% to 6%, in line with consensus estimates. Margin expansion of 60 to 80 basis points is expected to support EPS growth of 9% to 11%, the report said.

RBC has a sector perform rating on ADP stock with a $290 price target. Q4 results are due July 29.

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