Western Union：2Q26回顾 - 又一次大幅利润不及预期，进一步提高成本执行门槛；下调EPS预测20%

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J P M O R G A N

North America Equity Research

31 July 2026

Western Union

2Q26 Recap - Another Large Profit Miss Further Raises

Cost Execution Bar; Cutting EPS Estimates 20%

2Q marks the second consecutive large profit miss, but this one seems a bit more

concerning as it wasn’t about discrete items that management expected, but rather

adverse mix that surprised management and will take time to mitigate, evidenced

by the cut in FY26 outlook after reaffirming it last quarter. Revenue and transaction

trends were generally fine (U.S. retail was quite weak though), but adverse mix

accelerated. In our view, the mix shift isn’t the surprise, but the magnitude was,

exposing some of the legacy skeletons in WU’s closet. In fairness to management,

they have been actively re-positioning the company to capture this mix shift with

its digital and beyond strategy, but perhaps at the expense of addressing the

operating frictions of their high-margin traditional business. Out of control factors

like migration trends and regulatory approval of Intermex acquisition played a role

as well, but we appreciate that management has identified the issues with a plan to

address them including a new Beyond Efficiency cost take out plan of $50M by

year end and a reduction in scope of initiatives (a risk we called out last qtr). FY26

revenue growth was cut by 150bps at the mid-point to 4-6% while EPS was reduced

by $0.50 to $1.25-$1.35 to reflect lower profit trajectory, delayed Intermex close

(Sept 1 assumed) and suspension of share repurchases (to maintain target

leverage). We’re reducing our EPS estimates close to midpoint of the outlook, and

maintain our Underweight rating given the high execution bar. We establish a

December 2027 price target of $8 (from prior Dec-26 PT of $8), which applies a

~4.5x multiple to our CY28E EPS.

Headline Summary. WU’s 2Q revenue results came in line, but profits came

in well below expectations (missing our adj. EPS estimate by ~20%, down 27%

y/y), driven by a number of structural changes (see below). 2Q total revenue

was down 1% FXN y/y at $1,013M, generally in line with JPMe/Street

$1,008M/$1,022M (-1%/+0% y/y adj). WU saw continued weakness in overall

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