It's been a rough Friday for Western Union (Western Union (WU)). The money transfer giant's stock is down more than 15% after the company's second-quarter earnings report, released Thursday after the bell, disappointed on multiple fronts and triggered a wave of bearish analyst commentary.
The numbers were ugly. Western Union reported quarterly earnings of 31 cents per share, well short of the 42 cents analysts were looking for. That's also a drop from the 42 cents per share it earned in the same quarter last year. Revenue came in at $1.013 billion, missing the $1.029 billion consensus estimate and down from $1.026 billion a year ago.
But the earnings miss was just the opening act. The real shocker came with the company's revised outlook for fiscal 2026. Western Union now expects adjusted earnings per share in the range of $1.25 to $1.35, a dramatic cut from its previous guidance of $1.75 to $1.85. Analysts had been modeling for $1.73. The company also trimmed its full-year adjusted sales forecast to $4.213 billion to $4.294 billion, down from the prior $4.237 billion to $4.357 billion range, though that still brackets the consensus estimate of $4.211 billion.
Wall Street didn't waste any time responding. Morgan Stanley reiterated its Underweight rating and slashed its price target to $6. Susquehanna kept its Neutral rating but cut its target to $8. Barclays also reaffirmed its Underweight stance and lowered its price target to $6. The message is clear: the near-term outlook for Western Union has deteriorated significantly.
CEO Devin McGranahan didn't sugarcoat the situation in the earnings release. "In the second quarter, we did not see the improvement in Americas Retail that we had expected, and the delayed close of our Intermex acquisition pushed out expected synergies, contributing to meaningful margin pressure and lower-than-expected EPS," he said. "This difficult operating environment requires us to accelerate cost reductions more forcefully in the second half of the year."
For traders, the technical picture is equally grim. The stock is trading about 19% below its 20-day simple moving average of $8.06, roughly 17% below its 50-day SMA of $7.84, and about 26% below its 200-day SMA of $8.84. That kind of distance from the major averages suggests sellers have been firmly in control, and any bounce attempts have been quickly sold.
Momentum indicators are screaming oversold. The relative strength index (RSI) sits at 25.45, deep in oversold territory after the latest leg down. But don't read too much into that as a bullish signal just yet. The "death cross" that formed back in May, when the 50-day SMA crossed below the 200-day SMA, keeps the longer-term bias pointed lower. And with the stock now trading below its previous 52-week low of $6.91, the path of least resistance appears to be down.
Here are the key levels to watch:
- Key Resistance: $7.84
- Key Support: $6.91
At the time of publication on Friday, Western Union shares were down 15.36% at $6.50, marking a new 52-week low. The stock is now trading at levels not seen in years, and the onus is on management to prove that the cost-cutting measures announced for the second half of the year will be enough to stabilize the business.
