Western Union gaps higher amid a possible tie-up with Ripple
Payment services stock The Western Union Company (NYSE:WU) is rallying today, thanks to an upgrade to "neutral" from "negative" at Susquehanna, along with a price-target hike to $21 from $17. This positive analyst attention is based on reports that WU could be partnering with cryptocurrency concern Ripple Labs to implement blockchain technology into its portfolio.
WU shares are up 4% at $21.42 in early action, after trading as high as $22.21 out of the gate -- within striking distance of the stock's annual high of $22.70. After a lengthy sideways grind for the shares through much of 2017, WU is now trading above resistance around $20.50 for the first time in nearly 12 months.
In response to WU's generally uninspiring performance on the charts, options traders have loaded up on bearish bets. The equity's Schaeffer's put/call open interest ratio (SOIR) stands at 2.41, showing put open interest outweighs call open interest among options expiring within three months. This reading ranks in the 81st percentile of its annual range, pointing a stronger-than-usual skew toward bearishly oriented options.
Elsewhere, shorts have also been targeting WU. Short interest on the stock short interest rose nearly 9% in the past two reporting periods, and now accounts for 10% of the stock's total available float -- or 7.8 times the stock's average daily trading volume.
Not surprisingly, Susquehanna is in the minority with its positive outlook on WU. Currently, the stock sports just three "strong buy" ratings from analysts, compared to seven "holds" and six "strong sells."