Western Union (WU) faces an "impaired" outlook for revenue and profit growth in North America as competition intensifies in an "increasingly negative" macro and political environment, Morgan Stanley said Tuesday in a report.

North America revenue fell 11% in Q2, driven in part by declining outbound remittances, notably in the US-Mexico corridor, as rising deportations reduce the number of in-person money transfer transactions, the report said.

A tax on certain remittances, immigration uncertainty and competition from stablecoin providers are compounding the challenges facing Western Union, the report said.

Morgan Stanley projects 2025 of $4.06 billion, a 3.5% decline from a year earlier, versus an earlier projected drop of 3.2% decline estimate. Persistent immigration-related pressure may result in flat revenues of $4.05 billion in 2026 and adjusted EPS of $1.78.

Morgan Stanley cut its price target on Western Union stock to $7 from $9 and maintained its underweight rating.

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