Western Union (WU) Beats Stock Market Upswing: What Investors Need to Know

In the latest trading session, Western Union (WU) closed at $9.19, marking a +1.88% move from the previous day. The stock's change was more than the S&P 500's daily gain of 1.15%. At the same time, the Dow added 1.38%, and the tech-heavy Nasdaq gained 1.38%.

Shares of the money transfer company have depreciated by 2.7% over the course of the past month, outperforming the Business Services sector's loss of 4.78%, and the S&P 500's loss of 5.69%.

The investment community will be closely monitoring the performance of Western Union in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $0.4, reflecting a 2.44% decrease from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $968.05 million, reflecting a 1.58% fall from the equivalent quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.79 per share and a revenue of $4.18 billion, representing changes of +2.29% and +3.22%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Western Union. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.63% downward. Western Union presently features a Zacks Rank of #3 (Hold).

Looking at valuation, Western Union is presently trading at a Forward P/E ratio of 5.05. Its industry sports an average Forward P/E of 9.92, so one might conclude that Western Union is trading at a discount comparatively.

Meanwhile, WU's PEG ratio is currently 1.76. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Financial Transaction Services industry currently had an average PEG ratio of 0.79 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 182, this industry ranks in the bottom 26% of all industries, numbering over 250.

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

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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