Western Union Analyst Says It's 'Too Early To Bank On A Turnaround'

Shares of Western Union Co WU lost around 5% over the last five trading sessions.

Western Union’s turnaround needs to be considered as a “show-me” story and investors must wait for more evidence of the company being able to generate durable revenue growth, according to BMO Capital Markets.

The Western Union Analyst: Rufus Hone initiated coverage of Western Union with a Market Perform rating and $12 price target.

The Western Union Takeaways: The slower growing remittance market could delay the turnaround in the company’s retail C2C business, Hone said in the initiation note.

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Lower-margin remittance companies may continue to aggressively compete on price, which may take further market share from Western Union’s eetail C2C business, the analyst stated.

“We believe macro headwinds may necessitate additional investment spend from WU to continue driving customer/transaction growth, which underpins the strategy of returning the C2C business to sustainable revenue growth,” Hone wrote.

“Ultimately, we believe WU will struggle to sustainably grow operating profit while the industry backdrop remains challenging,” he added.

WU Price Action: Shares of Western Union were trading down 0.17% at $11.60 Tuesday. 

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