Citi Maintains Buy, $23 PT on Western Union
In a research report published today, Citi reiterated its Buy rating and $23 price target on Western Union (NYSE: WU) after the company announced a favorable tax settlement with the IRS.
Citi commented in the report, “Last night, Western Union announced that it has reached an agreement with the IRS to resolve all remaining issues related to the restructuring of its international operations in2003. There are three separate impacts from this agreement: (1) This resolution is expected to reduce WU's forward reported and cash tax rate by 700 bps beginning in 2012. (2) WU will make a one-time cash payment of ~$220 million (~$0.35 per share), which is in addition to a prior $250 million tax deposit made in 2010. (3) The company will also eliminate its tax contingency reserve and expects to record a one-time tax benefit of ~$200 million in 4Q11,”
Western Union is currently trading at $17.78, up 2.48% from yesterday's close.
