West Pharmaceutical Earnings: Solid Top-Line Growth Continues; Weaker Demand Expected in Near Term

Wide-moat West Pharmaceutical reported third-quarter earnings in line with our expectations. Total organic net sales grew 5.7% year over year, signifying the wind-down of COVID-19-related sales declines. Base sales excluding COVID-19 products increased by over 20% organically year over year, but management trimmed net sales guidance for 2023 to reflect the potential impacts of customers' restocking trends in the fourth quarter. We are maintaining our $290 fair value estimate as our top-line forecast was lower than previous guidance. Shares dropped 11% after the earnings release but still look overvalued to us.