Western Union provides money movement and payment services worldwide. The company operates in three segments: Consumer-to-Consumer, Consumer-to-Business, and Business Solutions. The company was founded in 2006 and is based in Englewood, Colorado.
WU Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Western Union CO with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Western Union CO ranked in the 34th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Western Union CO, consider:
The company's compound free cash flow growth rate over the past 5.69 years comes in at -0.05%; that's greater than only 18.85% of US stocks we're applying DCF forecasting to.
WU's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than just 12.86% of tickers in our DCF set.
The weighted average cost of capital for the company is 8. This value is greater than merely 16.59% stocks in the Financial Services sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CNFR, MCO, BSIG, BX, and GBL can be thought of as valuation peers to WU, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
Bank of America upgrades Western Union (WU) to a Buy rating after calling the risk-reward profile compelling. "In our view, the stock’s 300 bps of underperformance since the 2Q print has not been justified. C2C transaction trends have proven to be more resilient than feared at the outset of COVID-19,...
Money transmitters like Western Union , PayPal , and cryptocurrency firms will be able to more easily expand across the United States, after 48 state regulators agreed to a single set of supervisory rules that should reduce their compliance costs.