In the last closing session, Western Union (WU) price rose +2.17% to $9.43. This move outpaced the S&P 500’s daily gain of 0.64%. Meanwhile, the Dow Jones rose 1.23%, and the Nasdaq, a tech-heavy index, added 0.69%.
As of today, shares of the money transfer company had risen 2.1% in the past month. Meanwhile, the Business Services sector rose 1.24%, while the S&P 500 rose 0.55%.
The investment community will be paying close attention to Western Union’s earnings performance in its upcoming release. The company is expected to report EPS of $0.43, up 7.5% from the prior-year quarter. Besides, our latest consensus estimate calls for a revenue forecast of $1.05 billion, suggesting a downward movement of 1.14% compared to the same quarter last year.
WU’s full-year Zacks Consensus Estimates are calling for earnings of $1.73 per share and revenue of $4.09 billion. These results would represent year-over-year changes of -0.57% and 0%, respectively.
Investors should also pay attention to any more recent changes in analyst estimates for Western Union. Recent revisions tend to reflect the latest near-term business trends. Hence, positive changes in estimates indicate analysts are optimistic about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock movements. To benefit from this, we have created the Zacks Rank, an exclusive model that takes these estimate changes into account and provides an operating rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive, independently audited track record of outperformance, with #1 stocks contributing an average annual return of +25% since 1988. Over the past 30 days, the Zacks Consensus EPS estimate has stood at unchanged. Western Union currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Western Union is currently trading at a forward P/E of 5.17. This represents a discount compared to its industry’s average Forward P/E of 12.55.
One should also note that WU currently has a PEG ratio of 2.78. The PEG ratio is similar to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth path. The WU industry had an average PEG ratio of 0.92 as of yesterday’s close.
The financial transaction services industry is part of the business services sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 20% of all 250+ industries.
The Zacks Industry Rank evaluates the strength of our distinct industry groups by determining the average Zacks Rank of the individual stocks that make up the groups. Our research shows that the top 50% of ranked industries outperform the bottom half by a factor of 2 to 1.
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