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Western Union Co.

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Western Union shares significantly outperformed the Zacks categorized Financial Transaction Services industry, over the past one year. However, we see limited upside for the stock in the near term given the several challenges. The company is exposed to increasing competition, foreign exchange volatility, and increased investment spending. Global weakness continues to hurt money remittance. Nevertheless, we expect the company’s long-term growth to be driven by strategic investments in new products, services and technology. Focus on expansion of customer base, creation of digital infrastructure to boost the electronic channels business and development of the business-to-business segment will fuel growth.  Management narrowed 2016 constant-currency revenue growth outlook to around 3% from prior guidance of low to mid-single digit growth, and reiterated adjusted EPS guidance of $1.60-$1.70.


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