Western Union (WU) reported mixed Q4 results as macroeconomic pressures continued to weigh on "remittance corridors," though retail trends showed signs of stabilization and margins improved on cost controls, RBC Capital Markets said in a note Monday.
The company reported adjusted EPS of $0.45 and revenue of about $1.01 billion, missing revenue expectations but beating earnings forecasts as adjusted operating margin expanded 240 basis points year over year to 19.7%.
Consumer-to-consumer revenue of $872 million fell short of estimates, Consumer Money Transfer transactions declined 2.5% and Branded Digital transactions rose 13% on Middle East partnerships, according to the note.
Western Union said its acquisition of Intermex is expected to close in Q2, ahead of schedule, prompting revenue growth guidance for fiscal 2026 above prior expectations.
RBC raised the company's fiscal 2026 revenue estimate to about $4.30 billion and maintained adjusted EPS at $1.80, while initiating fiscal 2027 estimates of about $4.42 billion in revenue and $1.90 in adjusted EPS.
RBC has a sector perform rating on Western Union and maintained a $10 price target, citing ongoing "macro uncertainty" despite signs the company's competitive position has stabilized.
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