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Assessing Western Union (WU) Valuation After Mixed Short Term Gains And Weak Five Year Returns

Simply Wall St · 4d ago

Western Union stock: what recent returns might be telling investors

Without a single headline event driving attention, Western Union (WU) has drawn interest after a stretch of mixed share performance, with modest recent gains contrasting with weaker multi year total returns.

See our latest analysis for Western Union.

Western Union’s recent share price return of 16.56% over 90 days and 4.31% over 30 days at a share price of $9.43 contrasts with a much weaker 5 year total shareholder return decline of 39.28%. This suggests momentum has picked up after a prolonged softer period.

If Western Union’s mixed record has you thinking about what else is out there, this could be a good moment to broaden your search with fast growing stocks with high insider ownership.

With Western Union trading near its analyst price target and an intrinsic value estimate at a steep discount, the central question is whether the stock remains undervalued or whether the market is already pricing in future growth.

Most Popular Narrative: 2% Undervalued

The most widely followed narrative sees Western Union’s fair value of $9.63 as slightly above the last close of $9.43, framing a modest discount in need of closer inspection.

The analysts have a consensus price target of $9.318 for Western Union based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $17.0, and the most bearish reporting a price target of just $7.0.

Read the complete narrative.

Curious how modest revenue growth assumptions, shrinking margins and a low future earnings multiple still support this valuation gap? The full narrative lays out the math and the trade offs behind that view.

Result: Fair Value of $9.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on Western Union offsetting pressure from tighter immigration policies and rising digital competitors, which could weigh on transaction volumes and margins.

Find out about the key risks to this Western Union narrative.

Build Your Own Western Union Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build a custom view of Western Union in just a few minutes with Do it your way.

A great starting point for your Western Union research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Western Union has you thinking more broadly, this is the moment to widen your search and stress test your portfolio ideas before the next round of headlines hits.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.