Nomura Securities Maintains a 'Neutral' on Western Union Co. (WU); Relatively Weak Quarter, Are Shares Range Bound?
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Price: $12.93 +1.02%
Rating Summary:
4 Buy, 20 Hold, 10 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
4 Buy, 20 Hold, 10 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Nomura Securities maintains a 'Neutral' on Western Union Co. (NYSE: WU) price target of $19.00.
Analyst, Bill Carcache, said, "Overall, it was a relatively weak quarter for Western Union. Revenue growth in the company’s C2C business slowed ~400bps QoQ, from 4% in 1Q12 to 0% this quarter. Transaction growth slowed across the board, with noticeable declines (on a linked-quarter basis) in Europe/CIS, North America (especially Mexico), and Latin America. Macro-related top-line pressures were exacerbated by additional compliance costs associated with Dodd-Frank disclosure rules and the US Southwest region, resulting in weak C2C operating income performance (down 0.3% YoY). In our view, the stock will remain range-bound until either there is more clarity on the outlook for transaction growth or the margin trajectory improves. We think the former is highly dependent on the macro environment, and the latter is unlikely, given that the company will need to maintain elevated levels of investment spending in response to competitive pressures. While we maintain a negative bias, we are leaving our Neutral rating unchanged based on our view that the risk/reward to owning the shares is roughly in balance at this time."
FY 12E EPS from USD 1.74 to USD 1.70; FY 13E EPS from USD 1.94 to USD 1.80.
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 $17.27 yesterday.
Analyst, Bill Carcache, said, "Overall, it was a relatively weak quarter for Western Union. Revenue growth in the company’s C2C business slowed ~400bps QoQ, from 4% in 1Q12 to 0% this quarter. Transaction growth slowed across the board, with noticeable declines (on a linked-quarter basis) in Europe/CIS, North America (especially Mexico), and Latin America. Macro-related top-line pressures were exacerbated by additional compliance costs associated with Dodd-Frank disclosure rules and the US Southwest region, resulting in weak C2C operating income performance (down 0.3% YoY). In our view, the stock will remain range-bound until either there is more clarity on the outlook for transaction growth or the margin trajectory improves. We think the former is highly dependent on the macro environment, and the latter is unlikely, given that the company will need to maintain elevated levels of investment spending in response to competitive pressures. While we maintain a negative bias, we are leaving our Neutral rating unchanged based on our view that the risk/reward to owning the shares is roughly in balance at this time."
FY 12E EPS from USD 1.74 to USD 1.70; FY 13E EPS from USD 1.94 to USD 1.80.
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 $17.27 yesterday.
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