"[S]hares have hovered at the $7 level over the last month, but up ~15 percent since last earnings print, despite mixed news flow that we think could keep the stock range bound in the foreseeable future; hence, we are downgrading shares to Neutral and maintain our $8 PT," analyst Tien-tsin Huang wrote in a note.
On one hand, MoneyGram renewed its largest agent — Wal-Mart Stores, Inc. WMT — on May 25, but separately Wal-Mex struck a deal with rival The Western Union Company WU as a sign that exclusivity is less common.
More broadly, Brexit uncertainty could weigh more on money transfer stocks because of a higher mix of international business, given 45 percent of Moneygram's revenue stems from non-U.S. locations.
Shares of MoneyGram closed Monday's regular trading session at $7.09. In the pre-market hours Tuesday, shares were down 1.69 percent to $6.97 at time of writing.
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