Shares in The Western Union Co. (NASDAQ:WU) early Thursday on news of a downgrade in the stock.
BofA analyst Jason Kupferberg lowered his view of the stock to Underperform from Buy with a price target of $20, down from $25. The price target implies an 8.4% upside.
Kupferberg sees "multiple potential headwinds." New CEO Devin McGranahan is a first-time CEO with limited strategic options.
Kupferberg believes the Street will continue to view Western Union mainly as a "show me" story even once McGranahan identifies his strategic priorities.
He also continues to see structural concerns related to competition from pure-play digital remittance providers and possible disruptive threats from newer technologies.
In its recently released third-quarter results, the company beat the consensus earnings estimate, while its revenues fell short of projections.
Furthermore, analysts expect WU to report total revenue of around $1.29 billion in the fourth quarter, bringing its full-year amount to $5.08 billion, or roughly 4% lower than its 2019 figure. This slow recovery has made investors cautious about the stock.
Western Union trumpets its status as a global leader in cross-border, cross-currency money movement and payments. "Western Union's platform provides seamless cross-border flows, and its leading global financial network bridges more than 200 countries and territories and over 130 currencies," according to its most recent news release.
WU shares traded lower 58 cents, or 3.1%, at $17.87 soon after the opening bell Thursday.
