Western Union Q3 Earnings: Can NYSE:WU Hit Its $0.46 EPS Target?

in EARNINGS/INVESTING IDEAS by

The Western Union Company (NYSE:WU) is scheduled to report Q3 earnings results on October 29, 2020.

The company is expected to report earnings of $0.46/share on revenue of $1.246 billion. The consensus earnings per share (EPS) of $0.46/share is based on a poll of 20 analysts and represents a decline in eps of −5.6% over the same quarter last year, when the company reported earnings of $0.49/share.

The revenue forecast of $1.246 billion based on a poll of 17 analysts implies a year-over-year (YoY) decline in revenue of −4.7%. Last year the company reported $1.307 billion in revenue for the quarter.

Expected to report EPS contraction of −5.6% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,246.10 $1,306.90 −4.7%
EPS $0.46 $0.49 −5.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarter.

What are your expectations from The Western Union Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.35 $0.41 18.3% Beat
Q1, 2020 $0.42 $0.44 5.8% Beat
Q4, 2019 $0.43 $0.38 −10.8% Missed
Q3, 2019 $0.46 $0.49 6.5% Beat
Q2, 2019 $0.46 $0.45 −1.3% Missed
Q1, 2019 $0.43 $0.39 −8.5% Missed
Q4, 2018 $0.49 $0.49 0% Met
Q3, 2018 $0.48 $0.52 9.0% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −5.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $24.21 $22.88 −5.5% Decline
May 5, 2020 $18.85 $19.47 3.3% Increase
February 11, 2020 $28.30 $26.13 −7.7% Decline
October 31, 2019 $25.20 $26.48 5.1% Increase

Fundamentals And Technical Analysis

The Western Union Company is currently trading at $21.39/share, down −2.6% for the day. The company is trading at approximately 75.2% of its 52-week high of $28.45/share. The company’s stock price is down −6.5% since the last earnings report and down −1.2% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 42.23 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:WU Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 14.44 and a forward P/E multiple of 12.23.

The Western Union Company’s current share price also implies a price-to-book (P/B) multiple of −119.77. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21.39
P/E Ratio 14.4x
P/E Ratio (Fwd) 12.2x
PEG Ratio −0.3
Total Debt / Total Capital 26.9%
Levered Free Cash Flow $827.2 million
EV / EBITDA 8.9x

Finbox

The Western Union Company is a mid-cap stock with a market capitalization of $8.791 billion and a total enterprise value of $10.93 billion. The company operates in the Information Technology sector and the IT Services industry.

The Western Union Company provides money movement and payment services worldwide. The company operates in two segments, Consumer-to-Consumer and Business Solutions. The Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents. This segment offers international cross-border transfers and intra-country transfers, as well as money transfer transactions through Websites and mobile devices. The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border and cross-currency transactions for small and medium size enterprises, other organizations, and individuals; and foreign currency forward and option contracts. The company also offers cash-based and electronic-based bill payment services that facilitates payments from consumers to businesses and other organizations, as well as offers money order and other services. It serves primarily through a network of agents. The Western Union Company was incorporated in 2006 and is headquartered in Denver, Colorado.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.