Western Union (NYSE:WU) Shares Gap Up on Strong Earnings

Key Points

• Western Union's stock gapped up significantly after announcing strong earnings, with EPS of $0.47 exceeding the consensus estimate of $0.43.
• The company declared a quarterly dividend of $0.235 per share, yielding 10.5%, with a relatively low dividend payout ratio of 35.61%.
• Despite positive short-term performance, several analysts have lowered their price targets, indicating mixed sentiment towards the stock's future prospects.

The Western Union Company (NYSE:WU - Get Free Report)'s stock price gapped up prior to trading on Friday following a better than expected earnings announcement. The stock had previously closed at $8.14, but opened at $8.78. Western Union shares last traded at $9.02, with a volume of 7,271,691 shares changing hands.

The credit services provider reported $0.47 EPS for the quarter, topping the consensus estimate of $0.43 by $0.04. The firm had revenue of $1.03 billion for the quarter, compared to the consensus estimate of $1.03 billion. Western Union had a net margin of 21.83% and a return on equity of 66.11%. The business's revenue was down .3% compared to the same quarter last year. During the same period last year, the firm posted $0.46 earnings per share. Western Union has set its FY 2025 guidance at 1.650-1.750 EPS.

Western Union Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, September 30th. Shareholders of record on Tuesday, September 16th were given a dividend of $0.235 per share. The ex-dividend date of this dividend was Tuesday, September 16th. This represents a $0.94 annualized dividend and a yield of 10.5%. Western Union's dividend payout ratio (DPR) is currently 35.61%.

Analysts Set New Price Targets

A number of equities analysts recently issued reports on the stock. Monness Crespi & Hardt dropped their price target on shares of Western Union from $7.50 to $7.00 and set a "sell" rating on the stock in a research note on Tuesday, July 29th. Susquehanna dropped their price target on shares of Western Union from $11.00 to $9.00 and set a "neutral" rating for the company in a research report on Tuesday, July 29th. Deutsche Bank Aktiengesellschaft assumed coverage on Western Union in a research report on Thursday, July 17th. They issued a "hold" rating and a $9.00 price objective on the stock. Barclays set a $8.00 price objective on shares of Western Union and gave the company an "underweight" rating in a report on Thursday, July 31st. Finally, JPMorgan Chase & Co. set a $10.00 price target on shares of Western Union in a research report on Tuesday, July 29th. Ten investment analysts have rated the stock with a Hold rating and four have issued a Sell rating to the company's stock. According to data from MarketBeat.com, Western Union has an average rating of "Reduce" and a consensus price target of $8.55.

Insider Transactions at Western Union

In other Western Union news, CFO Matthew Cagwin bought 17,500 shares of Western Union stock in a transaction that occurred on Monday, August 18th. The shares were bought at an average cost of $8.36 per share, with a total value of $146,300.00. Following the transaction, the chief financial officer directly owned 225,611 shares of the company's stock, valued at approximately $1,886,107.96. This represents a 8.41% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Devin Mcgranahan purchased 176,470 shares of Western Union stock in a transaction on Thursday, August 21st. The shares were acquired at an average cost of $8.49 per share, with a total value of $1,498,230.30. Following the completion of the transaction, the chief executive officer directly owned 913,125 shares in the company, valued at $7,752,431.25. The trade was a 23.96% increase in their position. The disclosure for this purchase can be found here. 1.58% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. GAMMA Investing LLC raised its position in shares of Western Union by 188.1% during the 1st quarter. GAMMA Investing LLC now owns 3,803 shares of the credit services provider's stock worth $40,000 after purchasing an additional 2,483 shares during the last quarter. Wealth Enhancement Advisory Services LLC lifted its position in Western Union by 47.2% during the first quarter. Wealth Enhancement Advisory Services LLC now owns 122,813 shares of the credit services provider's stock worth $1,299,000 after buying an additional 39,382 shares in the last quarter. Janney Montgomery Scott LLC increased its stake in shares of Western Union by 35.2% in the 1st quarter. Janney Montgomery Scott LLC now owns 229,360 shares of the credit services provider's stock worth $2,427,000 after acquiring an additional 59,777 shares during the last quarter. Asset Management One Co. Ltd. grew its holdings in shares of Western Union by 45.5% in the first quarter. Asset Management One Co. Ltd. now owns 68,622 shares of the credit services provider's stock valued at $726,000 after purchasing an additional 21,456 shares during the period. Finally, Diversified Trust Co acquired a new stake in Western Union during the first quarter worth about $572,000. Hedge funds and other institutional investors own 91.81% of the company's stock.

Western Union Stock Performance

The firm has a market cap of $2.89 billion, a PE ratio of 3.39, a PEG ratio of 2.78 and a beta of 0.61. The company has a debt-to-equity ratio of 3.11, a quick ratio of 1.15 and a current ratio of 1.15. The firm's 50 day moving average price is $8.31 and its two-hundred day moving average price is $8.80.

Western Union Company Profile

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.