WU

Western Union Company

Finance/Real Estate, Consumer


Presented:05/20/2020
Price:$19.13
Cap:$7.86B
Current Price:$11.75
Cap:$3.97B

Presented

Date05/20/2020
Price$19.13
Market Cap$7.86B
Ent Value$9.79B
P/E Ratio7.7x
Book ValueN/A
Div Yield4.31%
Shares O/S410.91M
Ave Daily Vol8,381,222
Short Int19.23%

Current

Price$11.75
Market Cap$3.97B
The Western Union Co. is a holding company, which engages in the provision of money transfer and payment services. It operates through the following segments: Consumer-to-Consumer; Business Solutions; and Other. The Consumer-to-Consumer segment facilitates money transfers between two consumers. The Business Solutions segment offers payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The Other segment comprises electronic-based and cash-based bill payment services. The company was founded in 1851 and is headquartered in Denver, CO.

Publicly traded companies mentioned herein: Euronet Worldwide Inc (EEFT), Mastercard, Inc (MA), MoneyGram International Inc (MGI), PayPal Inc (PYPL), Sberbank of Russia PJSC (SBER RM), Visa Inc (V), Western Union Co/The (WU)

Highlights

The presenter is short shares of Western Union (WU) due to the belief that pre-COVID-19 headwinds for the business have been magnified. WU’s strength has historically been its brick-and-mortar (B&M) network; however, the businesses in which it operates are pivoting to digital, and WU has been playing catch-up. Digital’s penetration of the global money transfer market appears to be accelerating, which has a negative impact on margins, and competition is becoming more intense as the economy slows. A combination of pricing pressure, margin compression from the dilutive shift to digital, and market share loss lead the presenter to a $15 price target over the next 12 months.

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Idea Discussion

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