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What's the Strategic Value of Western Union's New Stores in Mexico?

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The Western Union Company (WU - Free Report) recently opened eight new branded stores in Mexico, making it the first international money transfer company to do so in the country. These owned locations are designed to provide a more direct, high-quality customer experience for individuals sending and receiving money.

The locations offer a range of services, including cross-border money transfers to over 200 countries and the ability to send funds to bank accounts, mobile wallets or cash collection. The stores further expand Western Union's reach, complementing its existing agent network in Mexico.

This move is part of Western Union's Evolve 2025 strategy, aiming to enhance customer access to its services while positioning itself closer to communities. The announcement comes at an opportune time as it coincides with the holiday season when remittance transactions traditionally increase.

Per the company, Mexican customers increase their transaction volume by nearly 10% in December compared to the previous month. As such, this move will better position WU to capture a larger share of the remittance market, which could lead to higher transaction volumes and revenues.

Western Union has a strong presence in Mexico, one of the top remittance-receiving nations. In 2023, inflows were recorded at more than $66 billion in the country, accounting for over 4% of its GDP. This is part of Western Union's broader plan to leverage its retail network as a growth gateway.

By opening these branded stores, WU can serve its customers directly, improving customer experience and loyalty, which will differentiate it from its peers in a highly competitive remittance market.

Western Union Stock Price Performance

Western Union shares have declined 8.8% in the year-to-date period against the 22.3% growth of the wider financial transaction services industry.

Zacks Investment Research
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Zacks Rank & Key Picks

Western Union currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Business Services space are Coinbase Global, Inc. (COIN - Free Report) , Cantaloupe, Inc. (CTLP - Free Report) and DLocalLimited (DLO - Free Report) . While Coinbase currently sports a Zacks Rank #1 (Strong Buy), Cantaloupe and DLocal have a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Coinbase’s current-year earnings of $5.39 per share indicates a massive jump from the year-ago level of 37 cents. COIN beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 341.4%. The consensus estimate for current-year revenues is pegged at $5.6 billion, implying 80.6% year-over-year growth.

The Zacks Consensus Estimate for Cantaloupe’s current-year earnings indicates a 113.3% year-over-year surge. CTLP beat earnings estimates in two of the trailing four quarters, met once and missed on the other occasion, with the average surprise being 20%. The consensus estimate for current-year revenues implies 15.9% year-over-year growth.

The consensus estimate for DLocal’s current-year earnings is pegged at 47 cents per share, which witnessed three upward revisions in the past month against none in the opposite direction. It beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 22.6%. The consensus estimate for DLO’s current-year revenues is pegged at $745 million, implying 14.6% year-over-year growth.

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