GET DAILY SIGNALSHow the ‘Surprising’ Acquisition of WildHorse Resource Benefits Chesapeake Energy
Chesapeake Energy Corporation's decision to acquire WildHorse Resource Development for nearly $4 billion in cash and stock came as a surprise to many investors, especially given the recent oil rout.
However, the CEO of Chesapeake Energy, Doug Lawler, labeled this deal as one of the most exciting events in the recent history of the company, in terms of it could potentially transform the company.
So how would this deal help Chesapeake Energy?
First, the acquisition of WildHorse is expected to strengthen and accelerate the delivery of Chesapeake's near-term strategic priorities of margin improvement, sustainable free cash flow generation, and a net debt-to-EBITDA ratio of 2.0. As the bulk of WildHorse's current production consists of higher-margin oil, CHK expects its margins on a per-barrel of oil equivalent (BOE) basis following this deal to expand by 35% in 2019 and more than 50% by 2020.
Second, with this acquisition, CHK is expected to more than double its production by 2020. As CHK adds WildHorse's 420,000 oil-rich acres in the Eagle Ford Shale to its assets, nearly 80% to 85% of which is unexplored, it could transform CHK into an oil growth machine in the coming years.
Third, the “surprise” addition of WildHorse is expected to immediately boost CHK's financial profile along with future growth prospects. The increased scale of its operations, coupled with its ability to drill longer through its capital-efficient drilling mechanism, will help the company in yielding stronger drilling returns as well as eliminate additional oilfield service and supply chain costs.
WRD's RSI Indicator climbs out of oversold territory
The RSI Indicator for WRD moved out of oversold territory on October 20, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 15 similar instances when the indicator left oversold territory. In 14 of the 15 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for WRD just turned positive on October 27, 2026. Looking at past instances where WRD's MACD turned positive, the stock continued to rise in 16 of 18 cases over the following month. The odds of a continued upward trend are 89%.
Following a +10.89% 3-day Advance, the price is estimated to grow further. Considering data from situations where WRD advanced for three days, in 66 of 92 cases, the price rose further within the following month. The odds of a continued upward trend are 72%.
WRD may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The Momentum Indicator moved below the 0 level on November 10, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on WRD as a result. In 29 of 37 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 78%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WRD declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 85%.
The Aroon Indicator for WRD entered a downward trend on November 10, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 17 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 29 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.229) is normal, around the industry mean (-1.906). P/E Ratio (-0.869) is within average values for comparable stocks, (9.554). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.824). Dividend Yield (0.000) settles around the average of (0.069) among similar stocks. P/S Ratio (14.641) is also within normal values, averaging (70.383).
The Tickeron Seasonality Score of 30 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 78 (best 1 - 100 worst), indicating slightly worse than average price growth. WRD’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 96 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. WRD’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
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