WST
West Pharmaceutical Services, Inc.$248.84
Sell
Target $214.28
Report: Mar 07, 2026Healthcare • Medical - Instruments & Supplies • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$248.84-13.9%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$214.28
(14% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$322.34
52 Week Low$187.43
Avg. 3 Month Volume978K
Efficiency
LTM Gross Margin35.9%
LTM EBITDA Margin25.6%
LTM EBIT Margin20.0%
LTM Operating Margin19.0%
LTM ROA12.4%
LTM ROE16.7%
LTM ROIC20.6%
LTM ROCE18.5%
Capital Structure
Market Cap (MM)$18.1B
Enterprise Value (MM)$17.6B
Shares Outstanding72.30M
Total Debt (MM)$321.10M
Cash & Equivalents (MM)$791.30M
LTM Net Debt (MM)$-470.20M
LTM Net Debt/EBITDA-0.6x
Growth
TTM Rev. Growth6.3%
Last 3-Yr Rev. CAGR2.1%
Last 3-Yr EBITDA CAGR-1.7%
Last 3-Yr EPS CAGR-4.6%
Valuation
Street Target Price$303.33
LTM EV/Revenue5.7x
LTM EV/Gross Profit15.9x
LTM EV/EBIT28.6x
LTM EV/EBITDA22.3x
LTM P/E36.6x
LTM EV/FCF37.5x
LTM P/FCF38.5x
LTM P/TB4.3x
LTM P/B5.7x
Dividend Yield0.3%
Payout Ratio12.6%
Executive SummarySituation: Current price is $248.84 versus fair value $214.28 (-13.9% expected return), and valuation confidence is stable. Debate: Bull case depends on SmartDose 3.5 mL Business Divestiture Management plans to sell this margin-dilutive asset to AbbVie in mid-2026. Bear case centers on GLP-1 Demand Upside If demand for injectable GLP-1 therapies exceeds the current 10% growth assumption, West's HVP elastomer volume could drive margins back toward historical peaks, invalidating the 'structural reset' thesis. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The fading destocking effect and 9% organic growth in HVP components will drive a multi-year recovery; GLP-1 elastomer demand (9% of sales) provides a high-growth tailwind that the market is underestimating.
Bear Case
Structural margin compression to 19.0% is permanent due to raw material inflation and SG&A intensity; the 2025 securities fraud lawsuit creates a significant reputational and financial overhang that justifies a lower multiple.
Key Catalysts
Mid-Term (6-18 months)Impact: Moderate
SmartDose 3.5 mL Business Divestiture Management plans to sell this margin-dilutive asset to AbbVie in mid-2026. While it removes a drag on...
Mid-Term (6-18 months)Impact: High
Litigation Resolution or Material Update A ruling on the motion to dismiss or a settlement in the 2025 securities fraud class action could r...
Long-Term (18+ months)Impact: Moderate
West is relevant for analysis now because the stock is trading at a 16% premium to its base-case DCF value despite structural margin compres...
Primary Risks
Concern: Medium
GLP-1 Demand Upside If demand for injectable GLP-1 therapies exceeds the current 10% growth assumption, West's HVP elastomer volume could dr...
Concern: High
Litigation Settlement Costs A significant financial penalty or judgment in the securities fraud lawsuit could impair the company's net cash...
Concern: Medium
The Stewardship Verdict is cautious due to the dual CEO/Chair role and the ongoing securities litigation. The Governance Outcome Tree sugges...
Recent Activity
2025-10-23SEC Filing (8-K)
+10.92%West Pharmaceutical Services reported Q3 2025 results and raised full-year 2025 guidance.
2025-07-24SEC Filing (8-K)
+22.78%West Pharmaceutical reports Q2 2025 results with strong growth and dividend announcement
2025-02-13SEC Filing (8-K)
-38.22%West Pharmaceutical Services reports Q4 2024 results with 2.3% sales growth and introduces 2025 guidance
2024-10-24SEC Filing (8-K)
+15.43%West Pharmaceutical Services reports Q3 2024 results with slight sales decline but raises full-year guidance
2024-07-25SEC Filing (8-K)
-14.40%West Pharmaceutical reports Q2 2024 results with sales decline and updated guidance
Valuation Table
9.8/10Decision Grade
Scenario Range
$165
Bear
$207
Base
$246
Bull
$249