MoneyGram shares slide to 3-year low on downgrade
CHICAGO (AP) — Shares of payment services provider MoneyGram International Inc. fell to a three-year low Thursday after a brokerage cited concerns about increased competition and downgraded the Dallas-based company's stock.
THE SPARK: Credit Suisse downgraded its rating to "Neutral" from "Outperform," and lowered its target price for the stock to $16 per share from $25 per share.
THE BIG PICTURE: Both MoneyGram and Western Union appear to have lowered online money transfer prices and are likely to adjust further amid heated competition.
THE ANALYSIS: "We are concerned increased competition will result in pricing pressure, slowing revenue growth and margin expansion," Credit Suisse analyst Georgios Mihalos said. "Furthermore, we are concerned that increased regulatory scrutiny across the industry could negatively affect MoneyGram."
SHARE ACTION: Down $1.08, or 8.7 percent, to $11.35 in afternoon trading, after earlier hitting a low of $11. The stock last traded that low in late 2009.
