NEW YORK (TheStreet) -- Shares of Automatic Data Processing (ADP) are up 1.6% to $77.10 after the provider of business outsourcing solutions said that its board of directors approved a plan to separate the Dealer Services business into an independent publicly traded company through a tax-free spin-off of 100% of Dealer Services to ADP shareholders.
Separately, Moody's (MCO) downgraded the company's Issuer Rating to Aa1 from Aaa.
As part of the rating action, Moody's assigned an Aa1 rating to a $5.25 million industrial revenue bond backed by ADP, and affirmed the company's P-1 Short-term Rating. Their rating outlook remains "stable."
TheStreet Ratings team rates AUTOMATIC DATA PROCESSING as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate AUTOMATIC DATA PROCESSING (ADP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows: