Western Union Co. (WU) Analyst Day is a Sell the News Event - BofA/Merrill Lynch

BofA/Merrill Lynch analyst Jason Kupferberg reiterated his $20 price target on Western Union Co. (NYSE: WU) after attending the company's analyst day where the company reiterated details of already disclosed cost-savings targets, which coupled with the market’s rotation to value names had driven significant outperformance for WU over the prior 4 weeks. This resulted in a sell the news situation with shares pulling back after the event.

The analyst stated "The operating profit margin and EPS targets reflect $150M in total annual savings by 2022. This includes $100M of savings from WU’s previously disclosed plans (2Q earnings call) to cut about 10% of headcount (~1,000 roles) and consolidate corporate offices (about $50M of these savings are anticipated to be realized in 2020). WU also disclosed plans to drive $50M of efficiencies on third-party spending and agent commissions (via channel mix shift and direct negotiations). WU plans to generate >$3B of operating cash flow cumulatively from 2020-2022, while returning $2.5-$3B through dividends and share repurchases over that period". No change to the Underperform rating.

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