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Why Shares of MoneyGram Are Enjoying a Midweek Bump

By Bram Berkowitz - Feb 17, 2021 at 12:34PM

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The jump may reflect investors' growing expectations that MoneyGram will report strong fourth-quarter earnings on Friday.

What happened

Shares of the money transfer company MoneyGram International (MGI 0.10%) rose as much as 18% at one point this morning, as the company prepares to report earnings from the fourth quarter of 2020.

So what

Following the company's third-quarter earnings report last October, shares of MoneyGram rose significantly. Investors may be thinking the same thing will happen when the company reports its fourth-quarter earnings on Friday, Feb. 19., triggering the early rise.

Picture of line moving upward on chart.

Image source: Getty Images.

Analysts are expecting MoneyGram to report fourth-quarter earnings and revenue that are up from what the company generated in 2019. The average estimate among analysts for the fourth quarter is $0.08 earnings per share (EPS), while the average estimate for the full year of 2020 is $0.21. 

That would be a significant increase from the $0.16 EPS loss MoneyGram reported in the fourth quarter of 2019, and the $0.85 EPS loss the company reported that year.

Now what

MoneyGram is a leading cross-border peer-to-peer payments company that has been transforming itself into more of a digital player. The pandemic has accelerated the use of digital payments, especially at the international level.

MoneyGram Online this past December grew cross-border transactions 142% year over year, making it the largest growth the app has ever experienced in a month.

Because the stock is likely trading higher based on earnings expectations, the actual results of MoneyGram's fourth quarter will be important. Beating or falling short of analysts' consensus estimates has the potential to significantly impact the stock price on Friday.

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