Photographer: Michael Nagle/Bloomberg
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Here's Why ADT Sank After Wall Street Recommended Buying Shares

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.

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.

— With assistance by Richard Richtmyer

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