Another Analyst Blasts Western Union (WU) as Guidance Disappoints

October 31, 2012 10:46 AM EDT Send to a Friend
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Price: $16.58 +0.91%

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    8 Buy, 14 Hold, 5 Sell

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Nomura Securities joined the chorus of analysts who have a negative view on Western Union. Shares of Western Union are down 25 percent early on Wednesday following the release of the company’s earnings. While EPS topped estimates by a penny, guidance was noticeably weak.

"This quarter's results reaffirm our view that pricing may eventually fall more quickly than the company is able to drive volume growth. At a minimum, we believe WU's premium pricing is unsustainable, and the company's revenue and earnings trajectory will remain under pressure as a result," said Nomura analyst Bill Carcache.

He also commented on management's new strategic initiatives, which include price cuts and restructuring.

"We received few details on how and where these initiatives will be implemented, and have low expectations regarding the company's ability to execute on them given its track record on past restructuring initiatives in 2008 and 2010. We're skeptical that this time will be any different," said Carcache.

Nomura has a Neutral rating on Western Union Co. (NYSE: WU) with a reduced price target of $14.00 (from $19.00).

For an analyst ratings summary and ratings history on Western Union Co. click here. For more ratings news on Western Union Co. click here.

Shares of Western Union Co. closed at $17.93 yesterday.


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