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Western Union's (WU +5%) $1.0 bln share repurchase authorization lights a fire under its stock today, helping it break out of a month-long consolidation. Shares of the money-transfer firm have languished over the years, correcting by over 50% since 2021 highs. Thus far in 2024, the stock has underperformed, giving up around 6%. Competition in the money-transfer space has proven an intense headwind for WU, contributing to weak yr/yr revenue growth as the company has not seen a quarter above +3% since 2021.

However, signs of a turnaround have cropped up lately, potentially paving the way for a meaningful rebound in 2025.

• In Q3, WU's Consumer Money Transfer segment, its primary business at 92% of FY23 revs, delivered a fifth consecutive quarter of mid-single digit adjusted revenue growth, underpinning success surrounding ongoing improvements related to the company's Evolve 2025 strategy. The central pillar of Evolve 2025 is returning WU to a market-competitive position through customer and agent enhancements. Since 2023, WU has flipped back to a market share gainer, touting a low-teens percentage slice of the money transfer market.
• Alongside consistent performance in Consumer Money Transfer, WU's Branded Digital and Consumer Services segments have also been performing at a high level, expanding sales by 9% and 15% yr/yr, respectively, on an adjusted basis. While comprising a significantly smaller piece of WU's overall business, the uplifting trends across each of its segments have provided it the confidence that it is on the right track to return to profitable revenue growth.
• External forces have assisted WU's recent signs of a turnaround. The global average cost of transferring funds continues to increase as multiple competitors raise prices to improve profitability. This dynamic has caused smaller-scale players to exit the industry as demand dries up amid price hikes. WU's formidable global presence, operating in 200 countries and territories, has supported its capacity to better manage disruptions, such as those related to an increasing cost of capital.

WU's $1.0 bln repurchase authorization, representing 26% of its market cap, underpins management's confidence in future cash flows as the business begins to display encouraging turnaround signs. The $1.0 bln repurchase plan also signals that management views its shares as relatively cheap. With momentum mounting following another promising report in Q3, WU could enjoy a decent bounce next year.