In a report released yesterday, David Windley from Jefferies maintained a Buy rating on West Pharmaceutical Services (WST – Research Report), with a price target of $245.00.
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David Windley has given his Buy rating due to a combination of factors that suggest potential growth and improvement in West Pharmaceutical Services’ financial performance. The company is expected to see a recovery in elastomer orders and an increase in automation for its SmartDose product, which could lead to higher incremental margins over the next several quarters. This anticipated improvement supports the reasonableness of the 2026 consensus earnings per share estimates and suggests potential upside in the company’s valuation.
Despite current challenges with the SmartDose device impacting margins negatively, management is focused on strategies to mitigate these headwinds. They are targeting mid-single-digit growth for high-value product components, which are expected to contribute significantly to gross profit. Additionally, efforts to reduce production costs through automation are underway, with a significant margin improvement anticipated once these measures are fully implemented. These strategic initiatives underline the potential for West Pharmaceutical Services to enhance its financial results and justify the Buy rating.
Windley covers the Healthcare sector, focusing on stocks such as Centene, Charles River Labs, and Icon. According to TipRanks, Windley has an average return of 9.2% and a 58.79% success rate on recommended stocks.
In another report released on May 22, Citi also maintained a Buy rating on the stock with a $300.00 price target.
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