UPDATE: Nomura Raises PT on Western Union Following 2Q13 Review

In a report published Wednesday, Nomura analyst Bill Carcache reiterated a Neutral rating on Western Union (NYSE: WU), and raised the price target from $13.00 to $17.50.

In the report, Nomura noted, “This quarter's results suggest the business is tracking in line with the company's stated plans for this year. In this respect, the results met lowered expectations. The C2B and Business Solutions segments are generating improved revenue growth, but both businesses are experiencing margin compression and in aggregate represent less than 10% of total company operating income. Longer term, we maintain a cautious stance and believe that further pricing cuts will occur as competitive pressures continue to erode WU's premium economics. We're tweaking our 2013 /14 EPS estimates to reflect this quarter's beat and the better near-term outlook for transaction growth trends. In addition, we're increasing our target price to $17.50 to reflect 12x our 2014 estimate. The potential for significant downward pressure on the shares is unlikely to resume until we enter 2H14, in our view. For now, we remain on the sidelines.”

Western Union closed on Tuesday at $17.75.