Western Union (NYSE:WU) Stock Jumps 3.9% - Still a Buy?

Key Points

• Western Union shares rose 3.9% to about $6.27, although trading volume was 87% below the average. The stock remains below its 50-day and 200-day moving averages.
• Analyst sentiment is highly negative: the stock has an average “Strong Sell” rating, with eight Sell and six Hold ratings and an average price target of $7.45.
• Western Union missed quarterly earnings expectations, reporting $0.31 in EPS versus $0.42 forecast and revenue of $1.01 billion. The company announced a quarterly dividend of $0.235 per share, implying a high annualized yield of approximately 15.2%.

Shares of The Western Union Company (NYSE:WU - Get Free Report) shot up 3.9% on Friday. The company traded as high as $6.24 and last traded at $6.2650. Approximately 1,191,533 shares were traded during trading, a decline of 87% from the average daily volume of 9,094,793 shares. The stock had previously closed at $6.03.

Analyst Ratings Changes

A number of equities research analysts have commented on WU shares. JPMorgan Chase & Co. reduced their price objective on Western Union from $9.00 to $8.00 and set an "underweight" rating for the company in a research note on Monday, July 13th. Cantor Fitzgerald cut their target price on Western Union from $8.00 to $7.00 and set an "underweight" rating on the stock in a report on Monday, August 3rd. Susquehanna reduced their price target on shares of Western Union from $10.00 to $8.00 and set a "neutral" rating for the company in a research report on Friday, July 31st. Morgan Stanley reduced their price objective on shares of Western Union from $7.00 to $6.00 and set an "underweight" rating for the company in a report on Friday, July 31st. Finally, Weiss Ratings raised shares of Western Union from a "sell (d+)" rating to a "hold (c-)" rating in a research report on Monday, August 3rd. Six investment analysts have rated the stock with a Hold rating and eight have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, Western Union currently has an average rating of "Strong Sell" and an average target price of $7.45.

Western Union Stock Up 2.7%

The company has a current ratio of 1.12, a quick ratio of 1.12 and a debt-to-equity ratio of 2.95. The firm has a market capitalization of $1.93 billion, a P/E ratio of 5.04 and a beta of 0.50. The stock's 50-day simple moving average is $7.25 and its 200-day simple moving average is $8.03.

Western Union (NYSE:WU - Get Free Report) last announced its earnings results on Thursday, July 30th. The credit services provider reported $0.31 earnings per share for the quarter, missing analysts' consensus estimates of $0.42 by ($0.11). The business had revenue of $1.01 billion during the quarter, compared to analysts' expectations of $1.02 billion. Western Union had a return on equity of 50.89% and a net margin of 9.79%.Western Union's quarterly revenue was down 1.3% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.37 EPS. Western Union has set its FY 2026 guidance at 1.250-1.350 EPS. As a group, research analysts predict that The Western Union Company will post 1.29 earnings per share for the current fiscal year.

Western Union Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Wednesday, September 16th will be paid a $0.2350 dividend. This represents a $0.94 dividend on an annualized basis and a yield of 15.2%. The ex-dividend date is Wednesday, September 16th. Western Union's dividend payout ratio is 76.42%.

Hedge Funds Weigh In On Western Union

Several institutional investors have recently added to or reduced their stakes in WU. Bank of America Corp DE raised its holdings in Western Union by 43.5% during the 1st quarter. Bank of America Corp DE now owns 3,838,382 shares of the credit services provider's stock valued at $33,509,000 after acquiring an additional 1,163,577 shares during the period. BlackRock Inc. purchased a new position in shares of Western Union in the second quarter valued at $241,806,000. Bessemer Group Inc. grew its position in shares of Western Union by 52.6% in the first quarter. Bessemer Group Inc. now owns 520,779 shares of the credit services provider's stock valued at $4,547,000 after purchasing an additional 179,423 shares in the last quarter. Connor Clark & Lunn Investment Management Ltd. bought a new stake in shares of Western Union during the 2nd quarter valued at $11,248,000. Finally, Capital Research Global Investors lifted its holdings in Western Union by 35.3% during the 4th quarter. Capital Research Global Investors now owns 10,407,960 shares of the credit services provider's stock worth $96,898,000 after purchasing an additional 2,716,385 shares in the last quarter. Institutional investors own 91.81% of the company's stock.

Western Union Company Profile

Western Union Company NYSE: WU is a global provider of money movement and payment services. The company enables consumers and businesses to send and receive money across borders and within individual markets through digital platforms, mobile applications and a network of retail agent locations.

Its services include consumer money transfers, international remittances, bill payments and money orders. Customers can typically initiate transfers online, through the Western Union app or at participating retail locations, with recipients able to collect funds in cash or receive them through eligible bank accounts, digital wallets or other payment methods, depending on the destination market.

Western Union traces its origins to 1851, when it was established as a telegraph company in the United States.

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