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Investing.com - Susquehanna has reduced its price target on Western Union Co. (NYSE:WU) to $9.00 from $11.00 while maintaining a Neutral rating on the stock. The company currently trades at $8.44, with InvestingPro analysis suggesting the stock is undervalued despite trading at a modest P/E ratio of 3.1x.
The financial services firm cited deteriorating macro migration trends as a key factor in its decision, noting that Western Union’s North America and Latin America revenues fell 11% and 10% respectively, despite positive performance in Europe where revenue grew 3%. Overall revenue declined 5.15% in the last twelve months, according to InvestingPro data.
Susquehanna indicated that while there are signs the business may have bottomed out, Western Union’s shortfall was significant enough to prompt the company to lower its annual guidance. Despite these challenges, the company maintains an impressive 11.14% dividend yield and has sustained dividend payments for 20 consecutive years.
The research note highlighted some positive developments, including a narrowing spread between Branded Digital transactions growth and revenue growth to three points, down from seven points in the previous quarter, which aligns with Western Union’s longer-term goal of three to four points.
While Susquehanna acknowledged encouraging use cases for stablecoin, particularly around reducing intermediaries, the firm emphasized that migration pressures are weighing on Western Union’s business, leading to the lowered estimates and reduced price target.
In other recent news, Western Union reported its second-quarter 2025 earnings, which revealed a miss on both earnings per share (EPS) and revenue against forecasts. The company’s adjusted EPS was $0.42, slightly below the expected $0.44, resulting in a 4.55% negative surprise. Revenue also fell short, coming in at $1.03 billion compared to the anticipated $1.04 billion, marking a 0.96% shortfall. Following these results, Keefe, Bruyette & Woods (KBW) lowered its price target for Western Union to $10.00 from $11.00, citing weaker top-line growth expectations and maintaining a Market Perform rating. JMP also reiterated its Market Perform rating, noting that the earnings miss was largely due to lower-than-expected revenue influenced by macroeconomic pressures related to U.S. immigration policies. These developments highlight the challenges Western Union faces amid current macroeconomic conditions.
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