West Pharmaceutical Services (WST) AI Stock Analysis

• Market Cap: $15.97B
• Dividend Yield: 0.38%
• Average Volume (3M): 628.80K
• Price to Earnings (P/E): 34.9
• Beta (1Y): 0.76
• Revenue Growth: -1.14%
• EPS Growth: -16.35%
• Country: US
• Employees: 10,600
• Sector: Healthcare
• Sector Strength: 39
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 1.45
• Shares Outstanding: 71,845,370
• 10 Day Avg. Volume: 729,027
• 30 Day Avg. Volume: 628,802
• PEG Ratio: -3.13
• Price to Book (P/B): 8.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 86.51
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 2.06
• Enterprise Value/Gross Profit: 23.69
• Enterprise Value/Ebitda: 7.99
• 1Y Price Target: $275.83
• Price Target Upside: 24.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: $245.00 ▲(10.23%Upside)

West Pharmaceutical Services exhibits strong financial performance and positive earnings guidance, supporting a healthy outlook. However, technical indicators suggest mixed price trends, and a high valuation could limit upside potential. The balanced sentiment from the earnings call underscores both growth opportunities and challenges, including executive transitions.

Positive Factors

Customer Partnerships

West has announced it provides packaging materials to weight loss drug leaders Novo Nordisk and Eli Lilly, which are at the forefront of weight loss drug manufacturing.

Financial Performance

Revenue of $698.0 million beat consensus estimates and guidance was increased.

Market Position

WST is a leading pharma packaging company with a market share of over 70%.

Negative Factors

Cost Challenges

No mitigations to offset $20 million-$25 million tariff costs have been announced.

Margin Pressures

Operating profit margin contracted to 15.3% from 17.7%, impacted by restructuring charges and a shift in product mix away from higher-margin components.

Product Margins

The recent SmartDose launch has resulted in negative gross margins, which management must address to achieve long-term revenue growth and margin targets.

West Pharmaceutical Services Business Overview & Revenue Model

Company Description

West 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 Money

West Pharmaceutical Services generates revenue primarily by manufacturing and selling proprietary and contract-manufactured components and systems used in the delivery of injectable drugs. The company's key revenue streams include sales of seals, stoppers, and delivery systems for vials, syringes, and other injectable packaging systems. West partners with a wide range of pharmaceutical and biotechnology companies to provide customized solutions that meet specific drug delivery needs. This includes long-term supply agreements, which ensure a steady revenue flow. The company's focus on innovation, quality, and regulatory compliance enhances its market position and contributes significantly to its earnings. Additionally, West Pharmaceutical Services invests in research and development to continually improve its product offerings, thereby expanding its market share and driving revenue growth.

West Pharmaceutical Services Financial Statement Overview

Summary

West Pharmaceutical Services demonstrates strong financial health with a stable revenue base and efficient cost management. The low debt-to-equity ratio and strong equity position indicate prudent leverage management, while the solid operating cash flow supports long-term growth. However, slight revenue and profit fluctuations slightly temper the score.

Income Statement

West Pharmaceutical Services exhibits stable revenue with a slight decline in recent periods. The gross profit margin remains strong, indicating efficient cost management, while net profit margins show a slight decrease. The EBIT and EBITDA margins demonstrate healthy operational efficiency despite recent fluctuations in revenue.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio, indicating prudent leverage management. Return on equity is stable, reflecting consistent profitability. The equity ratio is robust, underscoring a strong equity position relative to assets.

Cash Flow

Operating cash flow is strong, supporting the company's ability to generate cash. While free cash flow has seen some decline, the company's cash flow ratios indicate a healthy conversion of net income to cash, with sufficient free cash flow to support investments and financing activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.90B	2.89B	2.95B	2.89B	2.83B	2.15B
Gross Profit	1.00B	998.50M	1.13B	1.14B	1.18B	767.80M
EBITDA	729.50M	743.80M	844.10M	887.90M	895.20M	531.70M
Net Income	467.20M	492.70M	593.40M	585.90M	661.80M	346.20M
Balance Sheet
Total Assets	2.34B	3.64B	3.83B	3.62B	3.31B	2.79B
Cash, Cash Equivalents and Short-Term Investments	439.10M	484.60M	853.90M	894.30M	762.60M	615.50M
Total Debt	329.30M	302.30M	309.00M	317.90M	325.30M	325.70M
Total Liabilities	768.20M	961.10M	948.50M	931.90M	978.40M	939.30M
Stockholders Equity	1.57B	2.68B	2.88B	2.68B	2.34B	1.85B
Cash Flow
Free Cash Flow	306.90M	276.40M	414.50M	439.40M	330.60M	298.10M
Operating Cash Flow	664.60M	653.40M	776.50M	724.00M	584.00M	472.50M
Investing Cash Flow	-359.40M	-378.70M	-368.70M	-288.20M	-253.10M	-179.50M
Financing Cash Flow	-498.60M	-622.60M	-459.60M	-293.60M	-168.10M	-137.10M

West Pharmaceutical Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 222.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WST, the sentiment is Positive. The current price of 222.26 is above the 20-day moving average (MA) of 221.23, above the 50-day MA of 215.74, and below the 200-day MA of 269.42, indicating a neutral trend. The MACD of 1.44 indicates Positive momentum. The RSI at 55.48 is Neutral, neither overbought nor oversold. The STOCH value of 63.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WST.

West Pharmaceutical Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATR	76 Outperform	$10.64B	29.44	15.15%	1.12%	0.34%	17.27%
WST	74 Outperform	$15.97B	34.90	17.42%	0.38%	-1.14%	-16.35%
HOLX	70 Outperform	$14.44B	27.35	11.77%	―	1.66%	21.95%
MASI	63 Neutral	$9.09B	116.65	-23.93%	―	-0.12%	-713.82%
BAX	60 Neutral	$15.91B	136.07	-8.96%	2.19%	-20.17%	-138.32%
RGEN	56 Neutral	$7.16B	―	-1.16%	―	4.88%	-196.93%
Sector *	52 Neutral	$7.50B	0.31	-61.87%	2.27%	17.10%	1.59%

West Pharmaceutical Services Corporate Events

West Pharmaceutical Services Hosts 2025 Shareholder Meeting

West Pharmaceutical Services held its 2025 Annual Meeting of Shareholders virtually on May 6, 2025, where shareholders voted on five proposals. The proposals included the election of directors, approval of executive compensation, amendments to the Articles of Incorporation and the 2016 Omnibus Incentive Compensation Plan, and the ratification of PricewaterhouseCoopers LLP as the accounting firm for 2025. Significant shareholder participation was noted, with 89.93% of common shares represented at the meeting.

West Pharmaceutical Services Reports Q1 2025 Financial Results

On April 24, 2025, West Pharmaceutical Services announced its first-quarter 2025 financial results, reporting net sales of $698.0 million, a slight increase from the previous year. The company also raised its full-year 2025 net sales and adjusted-diluted EPS guidance, reflecting confidence in its operational performance and market positioning. Despite a decline in reported-diluted EPS, the company’s strategic focus on high-value products and self-injection devices has driven growth in the Proprietary Products Segment. Additionally, West Pharmaceutical declared a third-quarter 2025 dividend, indicating a positive outlook for stakeholders.

West Pharmaceutical Announces Leadership Changes Amid Succession Planning

West Pharmaceutical Services announced significant leadership changes as part of its succession planning. Bernard Birkett, the Senior Vice President and Chief Financial Officer, will retire later in 2025, with a search for his successor already underway. Shane Campbell has been appointed as the Senior Vice President, Chief Proprietary Segment Officer, effective May 5, 2025, bringing extensive global management experience to the role. These changes are expected to support West’s strategic goals and long-term growth.

West Pharmaceutical Announces Departure of Senior Executive

On March 7, 2025, West Pharmaceutical Services announced the departure of Cindy Reiss-Clark, former Senior Vice President and Chief Commercial Officer. As part of her severance, she will receive salary continuation, welfare benefits, a pro-rated incentive payment, and outplacement services, in exchange for releasing claims against the company and adhering to noncompetition and nonsolicitation covenants.