Stock of the Day

March 2, 2020

West Pharmaceutical Services (WST)

$210.72
+$7.07 (+3.5%)
Market Cap: $14.72B

About West Pharmaceutical Services

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. This segment also provides drug containment solutions, including Crystal Zenith, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices; and 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. The company serves pharmaceutical, diagnostic, and medical device companies. It sells and distributes its products through its sales force and distribution network, contract sales agents, and regional distributors. West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Exton, Pennsylvania.

West Pharmaceutical Services Bull Case

Here are some ways that investors could benefit from investing in West Pharmaceutical Services, Inc.:

  • The stock is currently trading at $214.84, which is significantly lower than its 52-week high of $400.88, indicating potential for price appreciation.
  • West Pharmaceutical Services, Inc. reported a strong quarterly earnings result with an EPS of $1.82, surpassing analysts' expectations, which reflects the company's solid financial performance.
  • The company has a market capitalization of $15.56 billion, indicating a stable and established presence in the medical instruments sector, which can be attractive for long-term investors.
  • Analysts have a consensus rating of "Moderate Buy" with a price target of $344.00, suggesting that there is optimism about the stock's future performance.
  • West Pharmaceutical Services, Inc. has a low debt-to-equity ratio of 0.07, indicating a strong balance sheet and lower financial risk, which is appealing for risk-averse investors.

West Pharmaceutical Services Bear Case

Investors should be bearish about investing in West Pharmaceutical Services, Inc. for these reasons:

  • The stock has experienced significant volatility, with a 52-week range from $197.01 to $400.88, which may deter risk-averse investors.
  • KeyCorp recently lowered their price target from $470.00 to $325.00, indicating a potential decrease in expected growth and investor sentiment.
  • The company has a relatively high P/E ratio of 31.87, which may suggest that the stock is overvalued compared to its earnings, making it less attractive for value investors.
  • Despite a recent dividend payout of $0.21, the annualized yield of 0.39% is relatively low, which may not satisfy income-focused investors.
  • Market analysts predict a modest earnings growth of 6.67 EPS for the current fiscal year, which may not meet the expectations of investors looking for higher growth rates.

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