ADT Downgraded At Citi

Citi issued a report on

after recent analysis showed that the company's strong fundamentals may already be priced into the stock. Citi downgraded ADT from Buy to Neutral and raised its price target from $41 to $46. Analysts Jason Bazinet and Robert Koryl wrote, "Our prior $41 target price gives credit for future FCF that ADT could generate once Pulse is fully penetrated. And, with our higher price target, we now give credit for a potential DIY announcement. At current levels, therefore, we don't see material scope for further appreciation in the share price (absent a transitory lift from investors covering short positions)." ADT has reported solid year-over-year improvements in the value of acquired subsidiaries during the last two quarters driven by improving churn and good cost-to-serve margins. At ADT's Analyst Day, Citi believes that ADT could provide an articulation of the firm's long-term FCF potential and launch a DIY security offering. However, the analysts believe that neither of these will add significant value to the stock price. Shares of ADT last traded at $41.81.