UPDATE: Credit Suisse Initiates Coverage on ADT Corporation with Outperform Rating, $45 PT

In a report published Wednesday, Credit Suisse initiated coverage on ADT Corporation

with an Outperform rating and $45.00 price target. Credit Suisse noted, “We initiate coverage of ADT at Outperform with a $45 target price. ADT's separation from TYC dramatically lowered its cost of capital and has created an attractive long-term value opportunity for investors in our view. Positive cadence forming between key value drivers: (i) ARPU growth should see continued momentum given record spreads between gross account adds and disconnects made possible by Pulse; only 2.6% of ADT's 6.5mn subscribers represent Pulse customers, offering substantial penetration upside for highly ARPU accretive services across ADT's subscriber base (ii) increased customer loyalty leveraged through Pulse may help limit subscriber disconnects due to unsatisfactory service (10% of attrition) and help ADT re-capture accounts that move or relocate (44% of attrition); (iii) wireless systems are shortening installation times and enabling remote troubleshooting, driving down costs.” ADT Corporation closed on Tuesday at $37.84.