UPDATE: J.P. Morgan Reiterates Neutral Rating, $16 PT on Western Union Company
In a report published Monday, J.P. Morgan & Co. reiterated its Neutral rating and $16.00 price target on Western Union Company (NYSE: WU).
J.P. Morgan noted, “We rate WU shares Neutral as we attach value to the company's agent network, which provides its competitive advantage over peers and its investments in developing electronic channels. However we see limited near-term catalysts to boost EPS or valuation sentiment due to: (1) $1.3B spent on acquisitions away from the core on B2B firms (Custom House and Travelex) that added cyclicality and execution risk resulting in lower EPS. (2) Regulatory surprises that put WU's business at a temporary disadvantage leading to market share loss that could linger in certain corridors through year end. (3) The biggest risk to our thesis is more shareholder friendly capital deployment, but WU is already levered and committed to retiring 4-5% of shares out in FY12, so we do not see incremental capital deployment as an upside case this year.”
Western Union Company closed on Friday at $13.11.
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