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Western Union (WU) Gains As Market Dips: What You Should Know

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Western Union (WU - Free Report) ended the recent trading session at $8.17, demonstrating a +1.24% change from the preceding day's closing price. The stock exceeded the S&P 500, which registered a loss of 0.38% for the day. At the same time, the Dow lost 0.2%, and the tech-heavy Nasdaq lost 0.67%.

The money transfer company's shares have seen a decrease of 7.67% over the last month, not keeping up with the Business Services sector's loss of 0.66% and the S&P 500's gain of 4.06%.

Analysts and investors alike will be keeping a close eye on the performance of Western Union in its upcoming earnings disclosure. On that day, Western Union is projected to report earnings of $0.43 per share, which would represent a year-over-year decline of 6.52%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.02 billion, indicating a 1.39% decrease compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.7 per share and revenue of $4.08 billion. These totals would mark changes of -2.3% and -3.06%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Western Union. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 sporting a Zacks Rank of #4 (Sell).

In terms of valuation, Western Union is currently trading at a Forward P/E ratio of 4.75. This signifies a discount in comparison to the average Forward P/E of 14.6 for its industry.

One should further note that WU currently holds a PEG ratio of 2.77. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Financial Transaction Services industry was having an average PEG ratio of 1.19.

The Financial Transaction Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 44, placing it within the top 18% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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