AQUA - M&A boosts Evoqua to top industrial gainer of week JetBlue railroad stock among losers

The Industrial Select Sector SPDR ( XLI ) finished the week ending Jan. 27 in the green ( +2.17% ). XLI was among the nine, out of the 11 S&P 500 sectors, which closed the week with gains.

While acquisition news helped Evoqua climbed among gainers (in our segment), JetBlue led the decliners' list where there were also a few railroad stocks.

Private sector firms in the U.S. registered a further decline in output in January but it softened to the slowest pace in three months, according to the January S&P Global U.S. PMI. However, there were some positive signs for the economy as the U.S. GDP climbed to 2.9% in Q4 as per initial estimate, which was stronger than expected.

Meanwhile, the SPDR S&P 500 Trust ETF ( SPY ) rose +2.48% for the week, ahead of the Federal Reserve's meeting next week where a 25 basis point rate hike is anticipated.

The top five gainers in the industrial sector (stocks with a market cap of over $2B) all gained more than +12% each this week.

Evoqua Water Technologies ( NYSE: AQUA ) +16.45% . Evoqua's stock shot up on Monday after Xylem ( XYL ) agreed to acquire the Pittsburgh, Pa.-based company in an all-stock deal with an implied enterprise value of ~$7.5B.

AQUA had an SA Quant Rating — which takes into account factors such as Momentum, Profitability, and Valuation among others — of Hold . The stock had a factor grade of C+ for Profitability and C for Growth. The average Wall Street Analysts' Rating was Buy , wherein 3 out of 10 analysts saw it as Strong Buy.

Applied Industrial Technologies ( AIT ) +14.74% . The Cleveland-based company saw its shares rise on Thursday ( +11.36% ) after Q2 results beat estimates. AIT also raised its quarterly dividend by 2.9%.

The SA Quant Rating on AIT is Strong Buy , with a score of B+ for Momentum but D for Valuation. The average Wall Street Analysts' Rating has a Buy rating, wherein 2 out of 3 analysts view the stock as Strong Buy.

The chart below shows past 6-month price-return performance of the top five gainers and SP500:

TDCX ( TDCX ) +13.20% . The Singapore-based outsource customer services provider's stock got a boost on Friday ( +14.10% ). The SA Quant Rating on TDCX is Buy , with a score of A for Profitability and A- for Momentum. The average Wall Street Analysts' Rating on the stock is Strong Buy , wherein 3 out of 6 analysts tag the stock as Strong Buy.

United Rentals ( URI ) +13.14% . The stock surged +9.94% on Jan. 26 after the company announced a quarterly dividend, launched a $1B share buyback program and provided full-year 2023 outlook in its Q4 results a day ago during post market. The Stamford, Conn.-based company has a SA Quant Rating of Strong Buy , while the average Wall Street Analysts' Rating is Buy .

Hexcel ( HXL ) +12.88% . The structural materials maker for  the aerospace and defense sector witnessed its stock rise on Jan. 26 ( +9.03% ) after declaring a +25% increase in quarterly dividend and Q4 results which beat analysts expectations, on Jan. 25 post market. The SA Quant Rating on HXL and the average Wall Street Analysts' Rating, both, have a Hold rating of their own.

This week's top five decliners among industrial stocks (market cap of over $2B) all lost more than -5% each.

JetBlue Airways ( NASDAQ: JBLU ) -7.11% . The airline stock dipped the most on Friday ( -4.55% ), however a day ago even the company's Q4 results beating expectations could not cheer the stock up which closed -0.71% (on Jan. 26).

The SA Quant Rating on JBLU is Hold , with a factor grade of D+ for Profitability and C for Growth. The average Wall Street Analysts' Rating agrees with Hold rating of its own, wherein 10 out of 13 analysts view the stock as such.

Xylem ( XYL ) -7.04% . While acquisition news propelled Evoqua, it was the opposite for Xylem as the company's shares sunk on Monday ( -7.95% ) as the merger was seen as an 'textbook instance of overpaying.'

The SA Quant Rating on XYL is Hold , with a score of B for Momentum but F for Valuation. The rating is in contrast to the average Wall Street Analysts' Rating of Buy , wherein 4 out of 17 analysts tag the stock as Strong Buy.

The chart below shows past 6-month price-return performance of the worst five decliners and XLI:

Automatic Data Processing ( ADP ) -6.90% . The Roseland, N.J.-based company's stock dipped -4.66% on Wednesday after a mixed quarterly result as Q2 non-GAAP EPS beat estimates but revenue came in line.

The SA Quant Rating on ADP is Hold , with a score of A+ for Profitability but C- for Growth. The average Wall Street Analysts' Rating concurs with a Hold rating of its own, wherein 13 out of 19 analysts view the stock as such.

CSX ( CSX ) -6.03% . Railroad stocks fell on Wednesday after reports from several major operators offered cautious outlooks for 2023. Even the company's Q4 results surpassing analysts estimates also did not help the stock much.

The SA Quant Rating on CSX is Hold , which is in contrast to the average Wall Street Analysts' Rating of Buy .

Norfolk Southern ( NSC ) -5.85% . Norfolk was among the rail roads stocks that took a hit on Jan. 25 ( -5.05% ). The company's quarterly results also did not provide support as profit fell short of estimates. The SA Quant Rating and the average Wall Street Analysts' Rating on NSC, both, have a Hold rating of their own.

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