Western Union (WU) stock dropped to $9.51, down 1.86% compared to the previous day. In contrast, the S&P 500 rose by 0.16%, the Dow increased by 0.17%, and the Nasdaq went up by 0.26%. Over the past month, Western Union shares fell by 1.22%, while the Business Services sector increased by 3.4% and the S&P 500 saw a 1.89% rise. Western Union is expected to report earnings of $0.43 per share, which represents a 7.5% increase from last year. Revenue is projected to be $1.05 billion, down 1.14% from the previous year. For the year, forecasts predict earnings of $1.73 per share and revenue of $4.09 billion, with a slight earnings decrease of 0.57% and no change in revenue.

Understanding Analyst Estimates

Recent changes to analyst estimates are crucial for spotting short-term business trends. The Zacks Rank system rates Western Union as #2 (Buy), indicating positive future prospects. The Forward P/E ratio for Western Union is 5.43, lower than the industry average of 13.36, suggesting it may be undervalued. Its PEG ratio stands at 2.92, while the Financial Transaction Services industry averages a PEG of 1. The industry ranks 182 out of over 250 on the Zacks Industry Rank, placing it in the bottom 26%. Looking back to 2025, Western Union stock did not perform as well as the overall market, despite having a “Buy” rating and a low valuation. As of January 13, 2026, the stock is trading around $11.50, still not gaining momentum, even with a strong market. This ongoing struggle indicates that competitive challenges in the digital remittance sector continue to worry investors. With the next earnings report set for early February 2026, the stock’s implied volatility has risen to nearly 45%, exceeding its 52-week average of 35%. This increase suggests that options markets expect a significant price change after the announcement. For those trading in options, this means higher premiums, making simple long call or put positions more expensive.

Options and Speculative Bets

Recent options activity shows a significant rise in volume for the February $12 strike calls, indicating that some traders believe in a possible upside surprise. However, this optimism is offset by high short interest, which is over 8% of the float. This creates a situation where both bullish and bearish traders are making moves before the earnings report. The low forward P/E ratio, noted back in 2025, means the stock still seems undervalued on the surface. This “value trap” scenario suggests that merely buying calls could be risky if the stock does not rise strongly after earnings. A bull call spread might be a safer strategy to capitalize on potential gains while managing costs linked to high implied volatility. Recent macroeconomic data revealed a slight increase in inflation, which could be a challenge for the company’s main consumers. Any drop in global remittance volumes—a key metric to monitor—could quickly weaken the bullish outlook. Thus, anyone holding long positions should consider hedging against the risk of revenue misses or a cautious outlook for 2026. Create your live VT Markets account and start trading now.

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