Salomon Smith Barney cut Automatic Data (ADP ) to neutral from outperform.
Analyst Patrick Burton believes there could be downside to Automatic Data's story next year. He is keeping his 1.2% fiscal 2003 (June) revenue growth rate. However, Burton says he assumed Automatic Data would control costs, even its investments if need be, so it could maintain its 42-year streak of 10% or better earnings per share growth.
While the company is cutting $100 million in costs, and buying back stock, it continues investing in the future. He cut the $1.94 fiscal 2003 EPS estimate to $1.85; and cut the $48 target to $39.