We expect money transferor
Western Union Co.
) to beat expectations when it reports fourth-quarter 2013
results on Feb 11.
Why a Likely Positive Surprise?
Our proven model shows that Western Union is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +6.45%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for the stock.
Zacks Rank #3 (Hold):
Note that stocks with Zacks Rank #1, 2 and 3 have a significantly
higher chance of beating earnings. The Sell-rated stocks (#4 and
5) should never be considered going into an earnings
The combination of Western Union's Zacks Rank #3 and +6.5% ESP
makes us confident of a positive earnings beat by the company on
What is Driving the Better-than-Expected
The company's fourth-quarter earnings are expected to benefit
from transaction growth due to pricing action and strong
electronic channels growth in the company's consumer-to-consumer
segment. The company's another segment - Business Solutions is
expected to accrue to earnings from its expanding product
offerings and increasing market penetration.
Also, Western Union's revenues from electronic offerings such as
mobile, internet, direct to bank and ATMs are expected to grow
contributing to overall earnings growth. The company had
performed strongly in the recent past as reflected by the
trailing four-quarter positive average surprise of 12.36%.
Other Stocks to Consider
Western Union is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these 3
players in the finance sector:
Walker & Dunlop, Inc.
), Earnings ESP of +2.7% and a Zacks Rank #2 (Buy).
), Earnings ESP of +0.94% and a Zacks Rank #2.
AllianceBernstein Holding L.P.
), Earnings ESP of +2.33% and a Zacks Rank #3.
ALLIANCEBERNSTN (AB): Free Stock Analysis
VENTAS INC (VTR): Free Stock Analysis Report
WALKER & DUNLOP (WD): Free Stock Analysis
WESTERN UNION (WU): Free Stock Analysis
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