Bull’s Eye Report: The Western Union Company (WU)

Will The Western Union Company (NYSE:WU) rip to new highs anytime soon? Who knows, but much of it depends on what analysts believe and what action the company’s insiders pursue. The stock closed higher on 06 December. The shares accumulated 0.13 points or 0.71 percent at $18.49 with a heavy trade volume of 6.115 million shares. After opening the session at $18.15, the shares went as high as $18.49 and as low as $17.995, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $8.17 billion and now has 441.62 million shares outstanding. The Western Union Company (WU) stock has gained 0.27 percent of market value in 21 trading days.

WU stock has a trailing 3-year beta of 1.05, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.76 a share in the trailing twelve months. The stock’s value has fallen -2.74 percent year to date (YTD) against a decline of -5.42 percent in 12 month’s time. The company’s shares still trade -16.75 percent away from its 1-year high of $22.21 and 6.3 percent up from 52-week low of $17.39. The average consensus rating on the company is 3.3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

The Western Union Company (WU) will probably climb 6.98 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $24-month high price target. This represents a whopping 29.8 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $20, which represents a return potential of 8.17 percent when compared to the closing price of the stock of $18.49 on Thursday, December 06. The lowest price target for the stock is $16.5 — slightly more than -10.76 percent from WU’s current share price.

History has shown that shares in The Western Union Company have gone up on 21 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of WU’s Q4 earnings on February 12. Analysts are forecasting revenue to climb 0.1 percent to $1.44B in the fiscal fourth quarter, while earnings are seen soaring by nearly 19.51 percent to $0.49 per share. It earned $0.52 per share, better than the $0.48, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.39B, worse than the $1.43B analysts expected. Earnings are estimated to increase by 13 percent this year, 1.15 percent next year and continue to increase by 3.83 percent annually for the next 5 years.

Let’s take a look at some insider activity at The Western Union Company (NYSE:WU) and see the pattern. The earliest insider trade took place on 11/14/2018. Rhodes Sheri parted with a total of 2.18 thousand shares of company at average share price of $19.02. The total for the sales was set at $41.37 thousand. After this transaction, the EVP, Chief Technology Officer account balance stood at 51.78 thousand shares. The stock lost -2.79 percent since that insider sale. On 07/03/2018, Williams Richard L, EVP & Chief Human Res. Ofcr., sold 20.21 thousand shares at a price per share of $20.5. This removed 414.24 thousand shares from the insider’s fortune and the stock saw a -9.8 percent retreat in value since the news became public. This transaction left 84.48 thousand shares in the EVP & Chief Human Res. Ofcr. account.

On 06/25/2018, EVP, Chief Technology Officer Rhodes Sheri performed a sale transaction worth $92.76 thousand. This sale at $21 each has eliminated 4.42 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -11.95 percent decrease since the transaction was reported. The insider now is left with 55.82 thousand shares remaining in the account. Almeida Odilon, who performs the EVP&Pres.-Global Money Trnsfr job, sold 81.01 thousand shares for $1.7 million. The disposal occurred on 06/07/2018 was priced at $21 per share. The share price plunged -11.95 percent since the reporting date. Almeida Odilon now left with a stake of 146.59 thousand WU stock worth $2.71 million after the insider selling.

The stock is currently hovering around the first support level of $18.16. Below this, the next support is placed in the zone of $17.83. Till the time, the WU stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 49.61 on daily chart, which may remain a cause for concern. If the price breaks below $17.83 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $18.65 mark may result into a pull-back move towards $18.82 level.

Shares of The Western Union Company (WU) are trading at a P/E ratio of 24.46 times earnings reported for the past 12 months. The industry WU operates in has an average P/E of 49.4. Its P/E ratio went as low as 11.05X and as high as 42.33 over the 5-year span.Further, it is sporting a 1.45 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.55. 40.2 percent is the gross profit margin for The Western Union Company and operating margin sits at 10.6 percent. Along with this, the net profit margin is -8.6 percent.