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Western Union (WU) Stock Sinks As Market Gains: Here's Why

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In the latest close session, Western Union (WU - Free Report) was down 1.06% at $8.37. The stock's change was less than the S&P 500's daily gain of 0.52%. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq added 0.52%.

The money transfer company's stock has dropped by 9.23% in the past month, falling short of the Business Services sector's loss of 0.47% and the S&P 500's gain of 5.95%.

The investment community will be paying close attention to the earnings performance of Western Union in its upcoming release. The company is expected to report EPS of $0.44, unchanged from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $1.03 billion, showing a 3.44% drop compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.77 per share and a revenue of $4.12 billion, signifying shifts of +1.72% and -2.11%, respectively, from the last year.

Investors might also notice recent changes to analyst estimates for Western Union. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% lower. Currently, Western Union is carrying a Zacks Rank of #4 (Sell).

Investors should also note Western Union's current valuation metrics, including its Forward P/E ratio of 4.77. This indicates a discount in contrast to its industry's Forward P/E of 16.15.

One should further note that WU currently holds a PEG ratio of 1.27. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Financial Transaction Services industry stood at 1.27 at the close of the market yesterday.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 48, this industry ranks in the top 20% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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