Sell Rating for Western Union Due to Potential Impact of Proposed Excise Tax and Long-term Underperformance

James Faucette, an analyst from Morgan Stanley, maintained the Sell rating on Western Union (WU – Research Report). The associated price target remains the same with $9.00.

James Faucette’s rating is based on the potential impact of a proposed 5% excise tax on remittances, which could affect Western Union’s operations. Although the company has a diversified revenue stream with only about 30% of its revenue coming from the US, the tax could still pose challenges if Western Union is unable to verify a portion of its sending base as required by the proposal.
Furthermore, Faucette points out that Western Union is likely to underperform in the long term compared to its peers in the payments sector. This is due to its slower growth rate and more volatile market exposures. As a result, despite the geographic diversification that limits total risk, the company is seen as a relative underperformer, leading to the Sell rating.

Faucette covers the Technology sector, focusing on stocks such as Endava, Block, and Shift4 Payments. According to TipRanks, Faucette has an average return of 5.4% and a 64.79% success rate on recommended stocks.

In another report released on April 28, Barclays also maintained a Sell rating on the stock with a $10.00 price target.