Western Union (WU) is facing mounting challenges in its money-transfer business due to increasing competition from digital platforms like Wise and Remitly. The company is experiencing a negative earnings outlook as estimates have been revised down from $1.75 per share to $1.29 in the current year, a decrease of approximately 26%. Notably, transactions from the U.S. to Mexico declined over 3% during the last quarter.
The effects of tighter U.S. immigration policies and a new federal tax on cash-funded remittances are contributing to Western Union’s current struggles. Analysts have unanimously lowered their earnings estimates, resulting in a Zacks Rank of #5 (Strong Sell) for the company.
Despite a low forward earnings multiple of around 5.6x and a dividend yield exceeding 13%, the outlook remains bleak as existing customers migrate to digital alternatives and additional revenue from the Intermex acquisition has yet to stabilize the core retail business.
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