Western Union (WU) Stock Analysis: Outperforming Market but Underperforming Sector, Undervalued Compared to Industry Peers?

Western Union (WU) recently closed at $8.56 per share, marking a +1.3% increase from the previous day's closing price. This move outpaced the S&P 500's daily gain of 1.11%, as the Dow rose 1.19% and the tech-heavy Nasdaq added 1.43%. However, over the past month, shares of the money transfer company have declined by 10.11%, underperforming the Business Services sector's loss of 1.02% and the S&P 500's gain of 3.92%.

Investors are now eagerly awaiting Western Union's upcoming earnings report, which is forecasted to show an earnings per share (EPS) of $0.44, unchanged from the same quarter last year. Revenue is expected to come in at $1.03 billion, a 3.44% decrease from the prior-year quarter. For the full fiscal year, Zacks Consensus Estimates project earnings of $1.77 per share and revenue of $4.12 billion, representing changes of +1.72% and -2.11%, respectively, from the prior year.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), takes these estimate changes into account and presents a viable rating system. Currently, Western Union holds a Zacks Rank of #4 (Sell). From a valuation perspective, Western Union is trading at a Forward P/E ratio of 4.77, a discount to its industry's Forward P/E of 15.91. Additionally, the company's PEG ratio of 1.27 is in line with the average for the Financial Transaction Services industry.

The Financial Transaction Services industry is part of the Business Services sector and currently holds a Zacks Industry Rank of 66, placing it in the top 27% of all industries. The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1.

In summary, while Western Union has underperformed recently, investors should keep a close eye on its upcoming earnings report and any changes in analyst estimates. The company's valuation metrics indicate that it may be undervalued compared to its industry peers. Be sure to follow all of these stock-moving metrics and more on Zacks.com for the latest investment recommendations and insights.

Western Union Company (WU) : Free Stock Analysis Report

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