2023-04-10 10:36:15 ET
- The Western Union Company ( NYSE: WU ) stock gained 1.1% in Monday morning trading after UBS upgraded the stock to Neutral from Sell as the risk of further downside remains limited in the wake of a historically low valuation.
- Trading at less than seven times next twelve months price-to-earnings, WU is two standard deviations below the 10-year average, analyst Rayna Kumar pointed out in a note. Shares were off 42% from a year ago as investors priced in competitive pressures.
- While Western Union's ( WU ) revenue growth could continue to be pressured, Kumar contended, "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%."
- The Neutral rate aligns with the Quant system rating and the average Wall Street analyst rating, both at Hold.
- Seeking Alpha contributor Justin Purohit in mid-March flagged WU as a Strong Buy as the recent selloff presents a "'too material to ignore' opportunity to lock up both the upside potential and a" 9% dividend yield.
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Western Union raised to Neutral at UBS as downside risk is limited