What You Need to Know Ahead of West Pharmaceutical Services’ Earnings Release

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 $24.4 billion, West Pharmaceutical’s operations span the Americas, Europe, the Middle East, Africa, and the Indo-Pacific. WST is expected to announce its fourth-quarter results on Thursday, Feb. 20.

Ahead of the event, analysts expect West Pharmaceutical to report a non-GAAP profit of $1.75 per share, down 4.4% from $1.83 per share reported in the year-ago quarter. While the company has surpassed analysts’ bottom-line estimates thrice over the past four quarters, it has missed the estimates on one other occasion. Its adjusted EPS for the last reported quarter dropped 14.4% year-over-year to $1.85 but surpassed the consensus estimates by a notable 22.5%.

For the full fiscal 2024, WST is expected to deliver an adjusted EPS of $6.67, down 17.5% from $8.08 in fiscal 2023. While in fiscal 2025, its earnings are expected to rebound 12.7% year-over-year to $7.52 per share.

WST stock has observed a marginal gain of 57 basis points over the past 52 weeks, lagging behind the Healthcare Select Sector SPDR Fund’s (XLV) 2.2% returns and the S&P 500 Index’s ($SPX) 25% surge during the same time frame.

West Pharmaceutical faced a challenging start to the year, with its stock prices plummeting 14.1% after releasing its FY 2023 results on Feb.15. The company issued a disappointing full-year topline and earnings guidance for 2024, projecting full-year net sales to reach approximately $3 billion, a modest increase from the $2.95 billion reported in FY 2023. Additionally, its adjusted EPS guidance range of $7.50 to $7.75 for 2024 indicated a continued decline in earnings from $8.08 in 2023, which shook investors’ confidence.

However, WST stock prices rebounded significantly, surging over 15.4% on Oct. 24 following the release of its Q3 earnings, which surpassed Wall Street’s expectations by a notable margin. Despite this, the overall net sales experienced a slight decline to $746.9 million due to lower volumes in Generics and Biologics market units. Moreover, its adjusted net income fell 16.2% year-over-year to $136.1 million.

Nonetheless, analysts remain strongly bullish on the stock’s prospects. WST has a consensus “Strong Buy” rating overall. Among the 10 analysts covering the stock, eight recommend “Strong Buy” and two suggest a “Hold” rating. Its mean price target of $379.22 represents a 10% premium to current price levels.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart

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