Here's Why ADT Sank After Wall Street Recommended Buying Shares

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(Bloomberg) -- All but one of the nine analysts who initiated research coverage on ADT Inc. Tuesday rated the stock a buy -- but that didn’t stop the shares from falling the most in three weeks.

Investors in the home-security company -- including majority holder Apollo Global Management LLC -- had been looking for bullish support from analysts at the same banks that underwrote January’s listing. But none of the initiations valued ADT above the $17 to $19 price range that underwriters had initially sought from investors just a month ago.

The stock closed down 4.2 percent, while peers in the S&P 600 Internet Software & Services Industry Index rose 2.1 percent.

Here's Why ADT Sank After Wall Street Recommended Buying Shares

Although the commentary from analysts was generally positive, it did offer hints as to why ADT has never traded above its $14 initial public offering price. Morgan Stanley analyst Toni Kaplan, whose bank was a lead underwriter for the listing, noted leverage and competition were among investors’ chief concerns.

©2018 Bloomberg L.P.

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