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Western Union (WU) Leverages Adonis & OXXO Alliances for Growth

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The Western Union Company (WU - Free Report) recently announced that it has joined forces with Adonis supermarkets to enhance cross-border money transfer services in Canada. The strategic partnership is expected to enable them to provide Western Union’s services to consumers in Adonis Seville and Adonis Griffintown locations in Montreal.

The move is expected to boost Western Union’s footprint in Canada. The company continues to increase its penetration of the global cross-border consumer payments market. It divested its Business Solutions business to focus on this core operation. It provides services across more than 200 countries and territories and through around 130 currencies, which makes it a global heavyweight in the remittance space.

It also announced that in Mexico, WU and its partner OXXO are reinforcing their cross-border remittance services to enhance their financial services offering. They are expected to implement a communication strategy within specific concept stores in Oaxaca, featuring Western Union services. This initiative will likely strengthen the longstanding partnership between WU and OXXO, spanning approximately eight years.

OXXO, a store chain of FEMSA´s Proximity Division, has more than 21 thousand stores in the country. Partnering with such entities allows Western Union to expand its network and address the growing demand for remittance services. Per the Bank of Mexico, the country received $63.3 billion in remittances last year, witnessing a 7.6% year-over-year increase.

Western Union has heavily invested in developing a strong digital platform, offering fast and cost-effective money transfer services. This investment has proven highly advantageous in the face of the rapidly expanding digital economy, with more individuals turning to digital money transfers to meet their financial requirements. It enables the company to create new partnerships and reinforce existing ones. Both the Adonis partnership in North America and the OXXO partnership in the southern part of North America are expected to bolster footfall within WU's network.

Price Performance

Western Union shares have gained 12.1% in the year-to-date period compared with the 4.7% rise of the industry it belongs to.

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Zacks Rank & Other Key Picks

Western Union currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the broader Business Services space are Global Payments Inc. (GPN - Free Report) , PagSeguro Digital Ltd. (PAGS - Free Report) and Fidelity National Information Services, Inc. (FIS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Global Payments’ 2024 earnings is currently pegged at $11.63 per share, indicating 11.6% year-over-year growth. It beat estimates in each of the past four quarters with an average surprise of 1.1%. The consensus mark for GPN’s revenues of $9.2 billion suggests a 6.5% increase from the year-ago level.

The Zacks Consensus Estimate for PagSeguro’s 2024 earnings is pegged at S1.29 per share, signaling an 18.4% jump from the previous year. It beat estimates in all the past four quarters, with an average surprise of 10.1%. The consensus estimate for PAGS’ revenues of $3.3 billion predicts a 1.8% increase from the year-ago level.

The Zacks Consensus Estimate for Fidelity National’s 2024 earnings of $4.78 per share suggests 41.8% year-over-year growth. It beat earnings estimates twice in the past four quarters and missed on other occasions. The consensus estimate for FIS’ current year revenues is pegged at $10.1 billion.

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