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Exton, Pennsylvania-based West Pharmaceutical Services, Inc. (WST) designs, manufactures and sells containment and delivery systems for injectable drugs and healthcare products. With a market cap of $23.9 billion, West Pharmaceutical’s operations span the Americas, Europe, the Middle East, Africa, and the Indo-Pacific.
Companies worth $10 billion or more are generally described as "large-cap stocks," West Pharmaceutical fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the medical instruments & supplies industry.
Despite its notable strengths, WST has slipped 20.2% from its 52-week high of $413.70 touched on Feb. 7. Nevertheless the stock has gained 9.8% over the past three months, outpacing the First Trust Indxx Global Medical Devices ETF’s (MDEV) 2.4% dip during the same time frame.
However, over the longer term, West Pharmaceutical’s performance looks grim. The stock has plunged 6.3% on a YTD basis and 8.2% over the past year, significantly lagging behind MDEV’s 4.9% gains in 2024 and 8.9% returns over the past 52 weeks.
To confirm the bearish trend and recent upturn, WST has traded below its 200-day moving average since late April and above its 50-day moving average since late October with some fluctuations.
West Pharmaceutical had a tough start to the year. Its stock prices plummeted 14.1% after the release of its FY 2023 earnings release on Feb.15 as the company gave a disappointing full-year topline and earnings guidance for 2024. The company forecasted its full-year net sales to reach approximately $3 billion, representing a minuscule growth from $2.95 billion net sales reported in FY 2023. Moreover, its adjusted EPS guidance range of $7.50 to $7.75 for 2024 represented a continued decline in earnings from $8.08 in 2023, which unsettled investor confidence.
However, more recently WST stock prices surged over 15.4% on Oct. 24 after the release of its Q3 earnings, as the company’s adjusted EPS of $1.85 exceeded analysts’ consensus estimates by a staggering 22.5%. However, its overall net sales have observed a marginal decline to $746.9 million due to lower volumes in Generics and Biologics market units. Meanwhile, its adjusted net income plunged 16.2% year-over-year to $136.1 million.
WST has significantly lagged behind its peer ResMed Inc.’s (RMD) 38.7% gains on a YTD basis and 38.6% returns over the past year.
Nevertheless, the stock has a consensus “Strong Buy” rating among the eight analysts covering it. The mean price target of $366 represents a 10.9% premium to current price levels.
