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West Pharmaceutical Services Inc WST

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Morningstar’s Analysis

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West Has Record Quarter and Raises Guidance; We're Above Top-Line Consensus, but Shares Look Pricey

Aaron Degagne Equity Analyst

Analyst Note

| Aaron Degagne |

Wide-moat West Pharmaceutical Services had a strong start to the year with organic growth of 31% and adjusted EPS growth of 103% in the first quarter. While management raised guidance and now expects over $2.63 billion of sales in 2021 (compared with $2.5 billion previously), our forecasts remain higher than guidance, and we are maintaining our $215 fair value estimate.

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Company Profile

Business Description

West Pharmaceutical Services is a Pennsylvania-based medical supplies company that operates as a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries. West develops, manufactures, and distributes elastomer-based supplies for the containment and administration of injectable drugs, including basic equipment such as syringes, stoppers, and plungers, along with somewhat more complicated devices including auto-injectors and other self-injection platforms. The company reports in two segments: proprietary products (77% of 2020 sales) and contract-manufactured products (23%). It generates 55% of its revenue from international markets and 45% from the United States.

530 Herman O. West Drive
Exton, PA, 19341-0645
T +1 610 594-2900
Sector Healthcare
Industry Medical Instruments & Supplies
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 9,200