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West Pharmaceutical Services Inc WST

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Stock XNYS Rating as of
$360.43 −7.75 (2.10%)
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As of Delayed Price Closed
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Company Report

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West Earnings: First-Quarter Revenue Slightly Better Than Expected; Maintaining Our Fair Value

Jay Lee

Wide-moat West Pharmaceutical’s first quarter was slightly better than we expected, with reported sales and organic sales down only 3% year on year instead of our forecast of a 6%-7% decline. At first glance, we are maintaining our fair value estimate of $336, and shares declined closer to our fair value after earnings. We continue to think the company’s long-term story is attractive and has potential upside, depending on the impact that the GLP-1 obesity drug industry will have on West’s long-term sales.

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Price vs Fair Value

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WST is trading at a 16% premium.
Price
$390.20
Fair Value
$813.00
Uncertainty
Medium
1-Star Price
$374.90
5-Star Price
$757.80
Economic Moat
Zlx
Capital Allocation
Mszvxtsb

Bulls Say, Bears Say

Bulls

West’s top-line growth is likely to be buoyed by secular trends in injectable drugs, especially increasing use of biologic drugs.

Bears

Many of West’s products and services could be insourced by customers, and a reversal of higher outsourcing could occur if customers decide they want more control over the supply chain.

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News

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Trading Information

Previous Close Price
$368.18
Day Range
$358.89–370.00
52-Week Range
$310.42–415.73
Bid/Ask
$352.77 / $417.94
Market Cap
$26.39 Bil
Volume/Avg
603,058 / 540,434

Key Statistics

Price/Earnings (Normalized)
44.94
Price/Sales
9.22
Dividend Yield (Trailing)
0.22%
Dividend Yield (Forward)
0.22%
Total Yield
2.69%

Company Profile

West Pharmaceutical Services is based in Pennsylvania, U.S., and is a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries. West sells elastomer-based packaging components (including stoppers, seals, and plungers), non-glass containment solutions, and auto-injectors for injectable drugs. The company reports in two segments: proprietary products (about 80% of total revenue) and contract-manufactured products (about 20% of total revenue). It generates approximately 55% of its revenue from international markets and 45% from the United States.
Sector
Healthcare
Industry
Medical Instruments & Supplies
Stock Style Box
Mid Growth
Total Number of Employees
10,600
Website
https://www.westpharma.com

Competitors

Valuation

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Metric
WST
PODD
BDX
Price/Earnings (Normalized)
 44.9461.5019.43
Price/Book Value
 9.8215.962.64
Price/Sales
 9.227.263.44
Price/Cash Flow
 35.3336.6220.60
Price/Earnings
WST
PODD
BDX

Financial Strength

Metric
WST
PODD
BDX
Quick Ratio
 1.742.360.46
Current Ratio
 2.613.511.08
Interest Coverage
 76.966.144.17
Quick Ratio
WST
PODD
BDX

Profitability

Metric
WST
PODD
BDX
Return on Assets (Normalized)
 15.47%8.02%3.40%
Return on Equity (Normalized)
 20.59%33.45%7.05%
Return on Invested Capital (Normalized)
 17.98%10.07%5.04%
Return on Assets
WST
PODD
BDX
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