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Western Union (WU) Registers a Bigger Fall Than the Market: Important Facts to Note

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Western Union (WU - Free Report) ended the recent trading session at $9.27, demonstrating a -2.52% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.06%. Elsewhere, the Dow saw a downswing of 0.17%, while the tech-heavy Nasdaq depreciated by 0.06%.

The money transfer company's stock has dropped by 1.04% in the past month, exceeding the Business Services sector's loss of 2.05% and lagging the S&P 500's gain of 1.99%.

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 7.5% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.04 billion, down 1.57% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.73 per share and a revenue of $4.08 billion, representing changes of -0.57% and 0%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Western Union. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.19% decrease. Western Union presently features a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Western Union has a Forward P/E ratio of 5.34 right now. This denotes a discount relative to the industry average Forward P/E of 13.35.

One should further note that WU currently holds a PEG ratio of 2.87. 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 of the close of trade yesterday, the Financial Transaction Services industry held an average PEG ratio of 1.02.

The Financial Transaction Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 194, placing it within the bottom 21% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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