Western Union (WU) exceeds market returns: Some facts to consider

Western Union (WU - Free Report) ended the recent trading session at $8.08, demonstrating a +1.13% change from the preceding day's closing price. This change outpaced the S&P 500's 0.34% gain on the day. On the other hand, the Dow registered a gain of 0.09%, and the technology-centric Nasdaq increased by 0.42%.

Prior to today's trading, shares of the money transfer company had lost 8.69% lagged the Business Services sector's gain of 0.7% and the S&P 500's gain of 3.54%.

The investment community will be paying close attention to the earnings performance of Western Union in its upcoming release. The company is predicted to post an EPS of $0.43, indicating a 6.52% decline compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $1.02 billion, indicating a 1.39% downward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $1.7 per share and a revenue of $4.08 billion, demonstrating changes of -2.3% and -3.06%, respectively, from the preceding year.

Any recent changes to analyst estimates for Western Union should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Western Union is currently a Zacks Rank #4 (Sell).

In the context of valuation, Western Union is at present trading with a Forward P/E ratio of 4.7. This expresses a discount compared to the average Forward P/E of 14.31 of its industry.

Meanwhile, WU's PEG ratio is currently 2.74. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.16 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 38, finds itself in the top 16% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions. 

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