Western Union Co. (WU) PT Lowered to $10 at Goldman Sachs, 'Weaker immigration trends weigh on top line'
Goldman Sachs analyst Will Nance lowered the price target on Western Union Co. (NYSE: WU) to $10.00 (from $11.00) while maintaining a Sell rating.
The analyst comments "WU reported a Q1 miss on lower than expected top line, which was offset by a lower than expected tax rate. WU saw continued pressure on its outbound North American volumes, as the geopolitical situation continued to weigh on cross border flows to Mexico, with LACA seeing further slowdowns driven by changing migration patterns, partially offset by continued strength in Consumer Services. WU reiterated its guide, including an outlook for a top line acceleration over the course of the year, noting however that its revenue was becoming harder to predict in the dynamic geopolitical backdrop, and also noted that the guidance includes a recently closed acquisition, which we believe was not previously well understood, and is expected to add roughly a point to revenues. Putting it all together, we believe trends are somewhat weaker than expected, and we remain Sell rated given the ongoing top line headwinds in the business, driven by spread widening and the global shift to digital remittances, as well as the near term exposure to immigration policy shifts around the world. However, we believe WU’s roughly 10% dividend yield is likely to support the stock, and a dividend cut is unlikely in the near term."