Maxar Technologies Inc. (MAXR) shares rose more than 13% during Tuesday's session after Reuters reported that Leonardo SpA and Thales SA were considering a joint bid for its MDA space business. The two companies already operate a joint venture, Thales Alenia Space, that's a Maxar customer using MDA technology. The acquisition would provide the companies with high-quality antennas for satellites.
Earlier this year, Maxar announced that it was considering the sale of its space robotics business, which could net more than $1 billion and enable it to pay down some of its $3.2 billion in debt. With shares half off of their highs for the year following the failure of its WorldView-4 satellite in January, investors are looking for ways to deleverage the balance sheet and refocus on growth.
Last quarter, the company reported revenue that fell 9.6%, driven by the Space Systems segment and the loss of the WorldView-4 satellite, although this was better than analysts were expecting to see. Net losses fell to $59 million compared to a $15 million gain a year earlier.
From a technical standpoint, the stock broke out from prior highs made in May. The relative strength index (RSI) moved into overbought territory with a reading of 74.59, but the moving average convergence divergence (MACD) remains relatively neutral. These indicators suggest that the stock could see some near-term consolidation before resuming its uptrend over the coming days and weeks.
Traders should watch for a close above prior highs at around $9.00, which could become a key support level over the coming sessions. After a prior of consolidation, traders should watch for an ongoing move higher toward $13.00. If the stock breaks back below these support levels, traders should watch for a move toward the 50-day moving average at $7.00 or lower trendline support at around $6.15 per share.
The author holds no position in the stock(s) mentioned except through passively managed index funds.