Western Union (NYSE:WU) analyst Rayna Kumar downgraded the stock to Sell from Neutral after the money transfer company provided "lackluster outlook" for its 2023 revenue.
The analyst is modeling for slightly worse than the company's guidance for adjusted revenue declining 2%-4% due to the risk of inflation.
"While UBS' economics team doesn't forecast a global recession, unemployment rates in key markets are expected to rise in 2023, including the UK (up 30 bps) and Canada (up 60 bps)," Kumar wrote in a note to clients. "A recession provides incremental risk given that management indicated its 2023 forecast does not include deterioration from current macro trends."
UBS reduced its estimates for Western Union (WU) 2023 EPS to $1.57 from $1.78 and 2024 EPS to $1.58 from $1.87.
Kumar's Sell rating turns more bearish than the SA Quant rating and the average Wall Street rating, both at Hold.
Last week, Western Union (WU) said its 2023 guidance reflects the sale of its Business Solutions unit, the loss of two key agents in Europe, the suspension of operations in Russia and Belarus, and the continued strength of the U.S. dollar.
SA contributor Ben Alaimo sees Latin America as key to the company's prospects.