Western Union lifted at UBS as ‘competitive pressures priced in’

By Sam Boughedda

UBS lifted Western Union (NYSE:) to Neutral from Sell, cutting its price target on the stock to $11 from $12 per share in a note to clients Monday.

Analysts told investors that competitive pressures are priced in due to WU’s “historically low valuation” after a 20% decline so far in 2023.

“In the near-term, revenue growth will likely continue to be pressured by a difficult competitive environment and promotional pricing in Western Union’s digital channel,” the analysts wrote. “That said, a recent recovery in digital transaction growth and stronger customer retention suggests Western Union may still generate revenue within its guided 2023 range of down 2-4%.”

“With shares trading at less than 7x NTM P/E, 2 standard deviations below Western Union’s 10-year average, downside risk remains limited, and shares already price-in a soft revenue outlook, we believe.”

The analysts feel that as Western Union invests significantly in compliance, it remains unlikely that its valuation will fall to the low levels seen by MoneyGram.