Morgan Stanley reiterated an Underweight rating and a $7 price target on Western Union Co. (NYSE: WU), saying that while the company's medium-term financial targets were clearly outlined, execution risks remained elevated given past challenges in its retail business.

Western Union's three-year financial goals include a compound annual revenue growth rate of 7%—or 3% excluding its Intermex acquisition—bringing total revenue to $4.8 billion to $5.3 billion by 2028. Adjusted earnings per share are expected to reach $2.30, reflecting an 11% CAGR.

The company projected that digital payments revenue would grow organically by 8% to reach up to $1.5 billion, while retail revenue was forecast to decline 4% to roughly $2.2 billion, excluding Intermex. Consumer services were expected to see the fastest expansion, rising 20% annually to as much as $1 billion.

Management anticipated $1.7 billion in free cash flow over the next three years, supported by $150 million in cost efficiencies. However, Morgan Stanley cautioned that achieving these goals would be difficult amid declining North American retail volumes and competitive pressures in key U.S.-Latin America corridors. The brokerage also flagged risks tied to integrating Intermex and replicating its European turnaround strategy in North America, saying its own forecast calls for just 1% revenue growth excluding Intermex between 2025 and 2027.