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West Pharmaceutical Services, Inc. (WST)
NYSE:WST
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West Pharmaceutical Services
(NYSE:WST)
65Neutral
Positive Factors
Biologics Market
The company has a significant presence in the biologics market, which is experiencing strong growth, contributing to potential margin improvements.
Market Position
WST is a leading pharma packaging company with a market share of over 70%, providing a strong position in the industry.
Negative Factors
Earnings Guidance
The Adj EPS guide in particular was a shock, resulting in WST shares declining by -38% on the day.
FY25 Guidance
FY25 guide was a surprise to investors, driven largely by one-off issues, raising concerns about short-term performance.
West Pharmaceutical Services (WST) vs. S&P 500 (SPY)
Market Cap
$15.90B
Dividend Yield0.37%
Average Volume (3M)1.05M
Price to Earnings (P/E)32.9
Beta (1Y)0.67
Revenue Growth-1.93%
EPS Growth-15.47%
CountryUS
Employees10,600
SectorHealthcare
Sector Strength78
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)6.69
Shares Outstanding72,292,730
10 Day Avg. Volume895,523
30 Day Avg. Volume1,053,223
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.71
Price to Cash Flow (P/CF)21.70
P/FCF Ratio20.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$312.86Price Target Upside53.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
West Pharmaceutical Services Business Overview & Revenue Model
Company DescriptionWest Pharmaceutical Services, Inc. designs, manufactures, and sells containment and delivery systems for injectable drugs and healthcare products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment offers stoppers and seals for injectable packaging systems; syringe and cartridge components, including custom solutions for the needs of injectable drug applications, as well as administration systems that enhance the safe delivery of drugs through advanced reconstitution, mixing, and transfer technologies; and films, coatings, washing, and vision inspection and sterilization processes and services to enhance the quality of packaging components. It also provides drug containment solutions, including Crystal Zenith, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices, as well as a range of integrated solutions, including analytical lab services, pre-approval primary packaging support and engineering development, regulatory expertise, and after-sales technical support. This segment serves biologic, generic, and pharmaceutical drug companies. The Contract-Manufactured Products segment is involved in the design, manufacture, and automated assembly of devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. It serves pharmaceutical, diagnostic, and medical device companies. The company distributes its products through its sales force and distribution network, as well as contract sales agents and regional distributors. West Pharmaceutical Services, Inc. was incorporated in 1923 and is headquartered in Exton, Pennsylvania.
How the Company Makes MoneyWest Pharmaceutical Services generates revenue through the sale of its proprietary products and services to pharmaceutical and biotechnology companies worldwide. The company’s revenue streams are primarily derived from its two main business segments: Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment focuses on the sale of West's branded packaging components and systems, which are critical in maintaining drug stability and efficacy. The Contract-Manufactured Products segment involves the manufacturing of components for third-party healthcare and consumer companies. Additionally, West benefits from long-term partnerships with major pharmaceutical companies, which often result in recurring revenue from ongoing supply agreements. The company’s emphasis on innovation and quality, along with its global manufacturing and distribution network, significantly contributes to its financial performance.
West Pharmaceutical Services Financial Statement Overview
Summary
West Pharmaceutical Services demonstrates strong financial health with robust profitability and a debt-free balance sheet. However, a decline in revenue and cash flow in 2024 highlights areas for improvement. The company's solid equity position and effective cost management provide a strong foundation despite these challenges.Income Statement
West Pharmaceutical Services demonstrates strong profitability with a consistent gross profit margin averaging around 35% over recent years. However, there has been a slight decline in revenue from 2023 to 2024, and EBIT margin has decreased from 2022 to 2024. The company's net profit margin remains solid, indicative of effective cost management despite revenue pressures.75
Positive
Balance Sheet
The company maintains a strong balance sheet with zero debt reported in 2024, effectively eliminating leverage-related risks. The equity ratio has been stable, reflecting a strong capital structure. However, the decline in total assets from 2023 to 2024 warrants monitoring.80
Positive
Cash Flow
Cash flow performance shows room for improvement, with free cash flow declining from previous levels. The operating cash flow in 2024 is missing, which raises concerns about cash generation. Despite this, historical data indicates manageable capital expenditures and positive free cash flow.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.89B | 2.95B | 2.89B | 2.83B | 2.15B | Gross Profit |
| 998.50M | 1.13B | 1.14B | 1.18B | 767.80M | EBIT |
| 569.90M | 676.00M | 734.00M | 752.30M | 406.90M | EBITDA |
| 743.90M | 844.10M | 887.90M | 895.20M | 531.70M | Net Income Common Stockholders |
| 492.70M | 593.40M | 585.90M | 661.80M | 346.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 484.60M | 853.90M | 894.30M | 762.60M | 615.50M | Total Assets |
| 3.64B | 3.83B | 3.62B | 3.31B | 2.79B | Total Debt |
| 302.30M | 309.00M | 317.90M | 325.30M | 325.70M | Net Debt |
| -182.30M | -544.90M | -576.40M | -437.30M | -289.80M | Total Liabilities |
| 961.10M | 948.50M | 931.90M | 978.40M | 939.30M | Stockholders Equity |
| 2.68B | 2.88B | 2.68B | 2.34B | 1.85B |
| Cash Flow | Free Cash Flow | |||
| 276.40M | 414.50M | 439.40M | 330.60M | 298.10M | Operating Cash Flow |
| 653.40M | 776.50M | 724.00M | 584.00M | 472.50M | Investing Cash Flow |
| -378.70M | -368.70M | -288.20M | -253.10M | -179.50M | Financing Cash Flow |
| -622.60M | -459.60M | -293.60M | -168.10M | -137.10M |
West Pharmaceutical Services Technical Analysis
Negative
203.21
Price Trends
256.68
Negative
291.94
Negative
299.18
Negative
Market Momentum
-8.18
Negative
36.62
Neutral
22.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WST, the sentiment is Negative. The current price of 203.21 is below the 20-day moving average (MA) of 226.76, below the 50-day MA of 256.68, and below the 200-day MA of 299.18, indicating a bearish trend. The MACD of -8.18 indicates Negative momentum. The RSI at 36.62 is Neutral, neither overbought nor oversold. The STOCH value of 22.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WST.
West Pharmaceutical Services Risk Analysis
West Pharmaceutical Services disclosed 34 risk factors in its most recent earnings report. West Pharmaceutical Services reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
West Pharmaceutical Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.81B | 26.90 | 15.68% | 1.18% | 2.74% | 30.22% | |
67 Neutral | $13.84B | 19.52 | 15.78% | ― | 1.75% | 50.25% | |
65 Neutral | $15.90B | 32.90 | 17.71% | 0.37% | -1.93% | -15.47% | |
64 Neutral | $8.23B | 116.65 | -25.23% | ― | 2.26% | -467.23% | |
58 Neutral | $6.83B | ― | -1.30% | ― | 0.33% | -171.08% | |
54 Neutral | $16.08B | 136.07 | -9.24% | 2.93% | -14.00% | -184.82% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% |
* Healthcare Sector Average
Performance Comparison
WST
West Pharmaceutical Services
203.21
-189.84
-48.30%
ATR
AptarGroup
140.18
0.08
0.06%
BAX
Baxter International
28.79
-12.72
-30.64%
HOLX
Hologic
60.86
-17.12
-21.95%
MASI
Masimo
144.40
1.90
1.33%
RGEN
Repligen
111.94
-61.87
-35.60%
West Pharmaceutical Services Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -36.95% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several strategic successes, including growth in the GLP-1 market and strong performance in HPP components. However, challenges in proprietary product revenues, contract manufacturing, and margins were significant issues that tempered the positive aspects. The company is actively addressing these challenges with strategic investments and initiatives.Highlights
Strategic Initiatives Success
Executed key strategic initiatives, capitalizing on the fast-growing GLP-1 market and strong win rate on newly approved molecules, particularly in biologics.
Shareholder Returns
Returned over $560 million to shareholders through share repurchase program during the year.
Organic Sales Growth
Fourth quarter revenues increased 3.3% on an organic basis, marking a return to quarterly revenue growth.
HPP Component Growth
HPP components, the most important contributor to long-term growth, is starting to show signs of strengthening with expected mid to high single-digit growth in 2025.
Annex One Projects
Over 200 Annex One projects in various stages with customers, expected to contribute 100-150 basis point growth expansion in 2025.
Lowlights
Proprietary Product Revenue Decline
Proprietary product organic revenues decreased 4.5% in Q4, driven by destocking.
Contract Manufacturing Challenges
Decision to not participate in the next-generation devices of two large glucose monitoring customers due to financial thresholds not being met.
Gross Margin Pressure
Proprietary products' fourth-quarter gross profit margin of 40.8%, 190 basis points lower than Q4 2023. Contract manufacturing gross profit margin was 17%, down 90 basis points.
Adjusted EPS Decline
Adjusted diluted EPS declined 0.5% for Q4.
Device Segment Margin Dilution
SmartDose expected to be margin dilutive in 2025 with ongoing efforts to improve delivery device economics.
Company Guidance
During the West Pharmaceutical Services, Inc. fourth quarter 2024 earnings call, guidance for fiscal year 2025 was provided, highlighting several key financial metrics. The company expects full-year 2025 net sales to be between $2.875 billion and $2.905 billion, with an organic sales growth of approximately 2% to 3%. Adjusted operating profit margin for 2025 is projected to slightly improve, driven by expansion in HPP components. They anticipate proprietary product segment organic revenues to increase, with biologics expected to grow high single digits to low double digits. The adjusted diluted EPS for 2025 is anticipated to range between $6.00 to $6.20. Capital expenditures are expected to decrease to $275 million in 2025, reflecting a return to traditional levels. Additionally, first-quarter 2025 net sales are projected between $680 million and $690 million, with adjusted EPS expected to be in the range of $1.20 to $1.25.West Pharmaceutical Services Corporate Events
Executive/Board Changes
West Pharmaceutical Announces Leadership Transition
Neutral
Mar 11, 2025
On March 7, 2025, West Pharmaceutical Services announced the departure of Cindy Reiss-Clark, Senior Vice President and Chief Commercial Officer, effective immediately. Her responsibilities will be temporarily managed by Aileen Kinsella, indicating a transitional phase in the company’s leadership structure.
Financial Disclosures
West Pharmaceutical Services Sees Q4 Sales Growth in 2024
Neutral
Feb 13, 2025
West Pharmaceutical Services announced its financial results for the fourth quarter and full year 2024, revealing a 2.3% increase in net sales in the fourth quarter, driven by a strong demand in their Proprietary Products segment, particularly self-injection devices. Despite a decline in full-year 2024 net sales by 1.9%, the company remains optimistic for 2025 with projected net sales growth and continued momentum in key areas, although it faces potential headwinds due to foreign currency exchange rates.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.