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Western Union Faces Earnings Pressure Amid Sector Struggles

Western Union's stock shows a slight decline amid broader market losses. Upcoming earnings reveal expected EPS drop and revenue decline, potentially impacting investor sentiment.

Date: 
AI Rating:   5

**Stock Performance and Market Comparison:** Western Union (WU) ended its latest trading session at $9.84, reflecting a minor decline of -0.1%. This is a narrower fall compared to the S&P 500's loss of 0.17%, which indicates some resilience. However, the company’s stock has underperformed, declining by 7.51% over the past month versus the Business Services sector's drop of 3.14% and the S&P 500's 3.94% loss.

**Earnings Outlook:** Investors are keenly awaiting Western Union's earnings report scheduled for April 23, 2025. The forecast predicts an EPS of $0.42, which represents a notable 6.67% decrease from the previous year’s quarter. Furthermore, revenue is anticipated to hit $1 billion, suggesting a 4.6% year-over-year drop. Both estimates indicate challenges ahead, which could negatively influence stock prices as investor sentiment may be affected by these declines.

For the full fiscal year, the estimates indicate a projected earnings growth of +2.3% with earnings per share expected to be $1.78, juxtaposed with a revenue forecast of $4.13 billion, reflecting a decline of 1.95%. This combination of slight earnings growth but overall revenue decline might signal mixed messages to investors.

**Analyst Revisions:** The recent 0.4% decrease in EPS estimates over the past month could imply a conservative outlook, although revisions offer insights into future performance perceptions. Currently, Western Union holds a Zacks Rank of #3 (Hold), suggesting that while the stock is not a strong buy, it may not be a strong sell either.

**Valuation Metrics:** The Forward P/E ratio of 5.52 indicates that Western Union’s valuation is substantially lower than the industry average of 14.64. This lower valuation suggests that investors may currently perceive the stock as undervalued. Additionally, a PEG ratio of 1.21 is favorable compared to the industry average of 1.31, indicating that after accounting for growth, the stock is relatively cheaper in its category.

**Industry Perspective:** Being part of the Financial Transaction Services industry, which holds a Zacks Industry Rank of 85, positions Western Union in a moderately favorable spot within the business landscape. This ranking reflects strong competitiveness as the top 50% of rated industries typically outperform the lower half significantly.

Stocks:  WU