Woodward (WWD, $121.96) to merge with Hexcel to create $6.4 billion company
Aerospace parts maker Woodward is planning to merge with Hexcel (which makes lightweight materials for aircraft, space and defense equipment).
Under the all-stock merger, current Woodward shareholders will own about 55% of the new company called Woodward Hexcel. Hexcel shareholders will own about 45%. Hexcel shareholders will get 0.625 shares of Woodward common stock for each share of Hexcel common stock. Woodward shareholders will get to have the same number of common stock shares in the newly combined company as before. The combined entity is valued at $6.4 billion.
Woodward will be raising its quarterly cash dividend to 28 cents a share, as part of the deal.
The combined company – set to be among the aerospace industry’s largest suppliers - will generate estimated net revenues of $5.3 billion (based on last year’s revenues), while having around 16,000 employees, and operations in 14 countries. Woodward Hexcel expects to save around $125 million in annual cost synergies by its second fiscal year.
The new company plans to invest $250 million on research and development in its first year.
Momentum Indicator for WWD turns positive, indicating new upward trend
WWD saw its Momentum Indicator move above the 0 level on June 06, 2023. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 89 similar instances where the indicator turned positive. In of the 89 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The 10-day moving average for WWD crossed bullishly above the 50-day moving average on May 02, 2023. This indicates that the trend has shifted higher and could be considered a buy signal. In of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where WWD advanced for three days, in of 318 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The 10-day RSI Indicator for WWD moved out of overbought territory on May 04, 2023. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 34 similar instances where the indicator moved out of overbought territory. In of the 34 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
The Moving Average Convergence Divergence Histogram (MACD) for WWD turned negative on May 23, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WWD declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (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 (3.340) is normal, around the industry mean (25.474). P/E Ratio (43.478) is within average values for comparable stocks, (309.299). Projected Growth (PEG Ratio) (1.690) is also within normal values, averaging (7.846). Dividend Yield (0.007) settles around the average of (0.023) among similar stocks. P/S Ratio (2.650) is also within normal values, averaging (169.876).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. WWD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock slightly better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued 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 SMR rating for this company is (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.
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Correlation & Price change
A.I.dvisor indicates that over the last year, WWD has been closely correlated with TDG. These tickers have moved in lockstep 69% of the time. This A.I.-generated data suggests there is a high statistical probability that if WWD jumps, then TDG could also see price increases.
