NYSE:WST

Stock Analysis Report

West Pharmaceutical Services

Executive Summary

West Pharmaceutical Services, Inc. manufactures and sells containment and delivery systems for injectable drugs and healthcare products in the United States, Germany, France, Other European countries, South Korea, and internationally.

Rewards

Earnings are forecast to grow 9.65% per year

Earnings grew by 16.8% over the past year

Risk Analysis

No risks detected for WST from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

How has West Pharmaceutical Services's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WST has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.5%

WST

-0.2%

US Medical Equipment

0.06%

US Market


1 Year Return

63.2%

WST

20.7%

US Medical Equipment

19.3%

US Market

Return vs Industry: WST exceeded the US Medical Equipment industry which returned 20.7% over the past year.

Return vs Market: WST exceeded the US Market which returned 19.3% over the past year.


Shareholder returns

WSTIndustryMarket
7 Day-2.5%-0.2%0.06%
30 Day8.7%-0.7%1.7%
90 Day16.2%7.6%9.0%
1 Year63.9%63.2%21.7%20.7%21.8%19.3%
3 Year105.6%102.3%80.8%75.7%49.5%39.9%
5 Year220.7%211.0%116.0%93.3%73.1%54.1%

Price Volatility Vs. Market

How volatile is West Pharmaceutical Services's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is West Pharmaceutical Services undervalued compared to its fair value and its price relative to the market?

52.1x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WST ($171.67) is trading above our estimate of fair value ($124.5)

Significantly Below Fair Value: WST is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WST is poor value based on its PE Ratio (52.6x) compared to the Medical Equipment industry average (47.4x).

PE vs Market: WST is poor value based on its PE Ratio (52.6x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: WST is poor value based on its PEG Ratio (5.4x)


Price to Book Ratio

PB vs Industry: WST is overvalued based on its PB Ratio (8.5x) compared to the US Medical Equipment industry average (4.1x).


Next Steps

Future Growth

How is West Pharmaceutical Services forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WST's forecast earnings growth (9.6% per year) is above the savings rate (1.7%).

Earnings vs Market: WST's earnings (9.6% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: WST's earnings are forecast to grow, but not significantly.

Revenue vs Market: WST's revenue (6.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: WST's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WST's Return on Equity is forecast to be low in 3 years time (15.5%).


Next Steps

Past Performance

How has West Pharmaceutical Services performed over the past 5 years?

16.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WST has high quality earnings.

Growing Profit Margin: WST's current net profit margins (13.1%) are higher than last year (12%).


Past Earnings Growth Analysis

Earnings Trend: WST's earnings have grown by 16.4% per year over the past 5 years.

Accelerating Growth: WST's earnings growth over the past year (16.8%) exceeds its 5-year average (16.4% per year).

Earnings vs Industry: WST earnings growth over the past year (16.8%) exceeded the Medical Equipment industry 2.7%.


Return on Equity

High ROE: WST's Return on Equity (16.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is West Pharmaceutical Services's financial position?


Financial Position Analysis

Short Term Liabilities: WST's short term assets ($1.0B) exceed its short term liabilities ($335.0M).

Long Term Liabilities: WST's short term assets ($1.0B) exceed its long term liabilities ($351.4M).


Debt to Equity History and Analysis

Debt Level: WST's debt to equity ratio (13.1%) is considered satisfactory.

Reducing Debt: WST's debt to equity ratio has reduced from 35.4% to 13.1% over the past 5 years.

Debt Coverage: WST's debt is well covered by operating cash flow (171.2%).

Interest Coverage: WST's interest payments on its debt are well covered by EBIT (62.4x coverage).


Balance Sheet

Inventory Level: WST has a high level of physical assets or inventory.

Debt Coverage by Assets: WST's debt is covered by short term assets (assets are 5.1x debt).


Next Steps

Dividend

What is West Pharmaceutical Services's current dividend yield, its reliability and sustainability?

0.38%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WST's dividend (0.37%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: WST's dividend (0.37%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: WST is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: WST is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: WST is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of WST's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

Eric Green (49yo)

4.8yrs

Tenure

US$5,378,813

Compensation

Mr. Eric M. Green has been the Chief Executive Officer of West Pharmaceutical Services, Inc. since April 24, 2015 and its President since April 2015. Mr. Green served as Executive Vice President and Presid ...


CEO Compensation Analysis

Compensation vs Market: Eric's total compensation ($USD5.38M) is below average for companies of similar size in the US market ($USD10.79M).

Compensation vs Earnings: Eric's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Eric Green
CEO, President & Director4.8yrsUS$5.38m0.075% $9.6m
Bernard Birkett
Senior VP1.7yrsUS$2.80m0.013% $1.6m
David Montecalvo
Senior VP and Chief Operations & Supply Chain Officer3.4yrsUS$1.52m0.0022% $279.4k
Silji Abraham
Chief Digital & Transformation Officer and Senior VP2yrsUS$1.49m0.0062% $785.0k
Eric Resnick
CTO & VP3.9yrsno datano data
Quintin Lai
Vice President of Corporate Development4.1yrsno data0.0056% $710.0k
George Miller
Senior VP4.3yrsUS$1.37m0.0088% $1.1m
Annette Favorite
Chief Human Resources Officer & Senior VP4.3yrsUS$1.14m0.0093% $1.2m
Richard Luzzi
Senior Vice President of Human Resources17.7yrsno datano data
Christopher Ryan
Senior VP of Commercial Products & Emerging Markets0.3yrsno datano data

4.0yrs

Average Tenure

54yo

Average Age

Experienced Management: WST's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Eric Green
CEO, President & Director4.8yrsUS$5.38m0.075% $9.6m
Myla Lai-Goldman
Director6yrsUS$246.87k0.017% $2.2m
Thomas Hofmann
Director12.3yrsUS$260.83k0.054% $6.8m
Patrick Zenner
Chairman of the Board4.6yrsUS$372.63k0.079% $10.1m
Mark Buthman
Director9yrsUS$278.91k0.037% $4.7m
Douglas Michels
Independent Director9yrsUS$280.60k0.037% $4.7m
Paula Johnson
Director14.3yrsUS$277.00k0.053% $6.7m
Paolo Pucci
Director3.4yrsUS$242.23k0.0086% $1.1m
William Feehery
Director8yrsUS$263.39k0.030% $3.8m
Deborah L. Keller
Independent Director2.7yrsUS$241.81kno data

7.0yrs

Average Tenure

58.5yo

Average Age

Experienced Board: WST's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

West Pharmaceutical Services's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: West Pharmaceutical Services
  • Ticker: WST
  • Exchange: NYSE
  • Founded:
  • Industry: Health Care Supplies
  • Sector: Healthcare
  • Market Cap: US$12.702b
  • Shares outstanding: 73.99m
  • Website: https://www.westpharma.com

Number of Employees


Location

  • West Pharmaceutical Services
  • 101 Gordon Drive
  • Lionville
  • Pennsylvania
  • 19341
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WSTNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1972
WPSDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972

Biography

West Pharmaceutical Services, Inc. manufactures and sells containment and delivery systems for injectable drugs and healthcare products in the United States, Germany, France, Other European countries, South Korea, and internationally. The company operates through 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, and washing and sterilization processes and services to enhance the quality of packaging components. It also provides drug containment solutions, including CZ, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices, as well as a range of integrated services, 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 components and devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. This segment 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. The company was founded in 1923 and is headquartered in Exton, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 00:54
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.