Nomura Securities Maintains a 'Neutral' on Western Union Co. (WU); Transaction Growth Positive, Margins Still Issue

Nomura Securities maintains a 'Neutral' on Western Union Co. (NYSE: WU) price target of $19.00.

Analyst, Bill Carcache, said, "It was a mixed quarter for Western Union, with overall results coming in roughly in line with expectations. Although C2C transaction (and revenue) growth trends appeared to trend upwards in certain geographies, macro and competitive challenges kept management from raising its guidance. Margins have been a lingering issue for Western Union for several years, and this quarter was no exception."

"Our 2012 EPS estimate of $1.70 (at the high-end of guidance) incorporates +5% total company revenue growth (~+7% constant currency revenue growth) and 24.5% operating margins (roughly in line with guidance)...In our view, the stock will remain uninspiring until the margin trajectory improves. We think this is unlikely, given that the company will need to continue elevated levels of investment spending as it faces competitive pressures from emerging money transfer alternatives."

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 $18.06 yesterday.

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