Morgan Stanley downgrades ADT rating

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Friday, April 5, 2013

BOCA RATON, Fla.—A report published this week by Morgan Stanley analyst Nigel Coe downgraded the rating on The ADT Corp. from equal-weight to underweight, citing a lack of “residual upside,” according to an article from Benzinga.com, a market-watch website.

In the April 3 report, the price target was lowered from $50 to $48. “Our price target falls by $2 to $48, driven by slightly more conservative longer-term Pulse adoption rate and attrition forecasts, in light of our most recent Home Security survey,” Coe noted in the report.

Coe added that ADT has outperformed since its October spin, gaining 36 percent vs. 21 percent for the S&P 500.

“The stock now trades below our $48 DCF-driven target price,” Coe said in the report. “Lack of residual upside is the principal driver for our downgrade.”