Morgan Stanley reiterated an Underweight rating and a $7 price target on Western Union Co. (NYSE: WU), saying that while the company’s medium-term financial targets were clearly outlined, execution risks remained elevated given past challenges in its retail business.
Western Union’s three-year financial goals include a compound annual revenue growth rate of 7%—or 3% excluding its Intermex acquisition—bringing total revenue to $4.8 billion to $5.3 billion by 2028. Adjusted earnings per share are expected to reach $2.30, reflecting an 11% CAGR.
The company projected that digital payments revenue would grow organically by 8% to reach up to $1.5 billion, while retail revenue was forecast to decline 4% to roughly $2.2 billion, excluding Intermex. Consumer services were expected to see the fastest expansion, rising 20% annually to as much as $1 billion.
Management anticipated $1.7 billion in free cash flow over the next three years, supported by $150 million in cost efficiencies. However, Morgan Stanley cautioned that achieving these goals would be difficult amid declining North American retail volumes and competitive pressures in key U.S.–Latin America corridors. The brokerage also flagged risks tied to integrating Intermex and replicating its European turnaround strategy in North America, saying its own forecast calls for just 1% revenue growth excluding Intermex between 2025 and 2027.
