Barclays Maintains an 'Overweight' on Western Union (WU); At Near Trough Valuations, Favorable Risk/Reward Despite Macro Uncertainty

Barclays maintains an 'Overweight' on Western Union Co. (NYSE: WU) price target of $24.00.

Barclays analyst says, "WU is currently trading close to trough valuation levels seen in late 2008/early 2009. The stock's substantial discount to its historical multiple (10.5x our 2011 EPS estimate and 9.5x our 2012 EPS estimate vs a next-12-months' multiple since its 2006 IPO of 14.4x) mirrors that of other employment-sensitive names, including temp staffing companies, and we believe potential benefits to WU from a skew toward temp labor in the current market may be similarly underestimated by the market. However, even assuming a more severe downside case, it's worth noting that WU experienced a relatively modest organic revenue decline of 4% in 2009 relative to other cyclical companies, with net income declining 7%, but EPS declining only 2% due to ongoing share repurchases (enabled by a strong balance sheet and consistent cash flow)."

For more ratings news on Western Union Co. click here and for the rating history of Western Union Co. click here.

Shares of Western Union Co. closed at $16.75 yesterday.

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