West Pharmaceutical Services Prepares for Q4 Results Amid Mixed Stock Performance
West Pharmaceutical Services, Inc. (WST), based in Exton, Pennsylvania, specializes in the design and manufacturing of systems for injectable drugs and healthcare products. With a market capitalization of $24.4 billion, the company operates across the Americas, Europe, the Middle East, Africa, and the Indo-Pacific region. Investors are eagerly anticipating West Pharmaceutical’s fourth-quarter financial results set to be announced on Thursday, Feb. 20.
Analysts Predict a Decline in Q4 Earnings
Experts estimate that West Pharmaceutical will report a non-GAAP profit of $1.75 per share for the fourth quarter, which represents a 4.4% decrease from the $1.83 reported in the same quarter last year. West has exceeded earnings expectations in three of the last four quarters, while it fell short in one instance. In the last quarter reported, adjusted earnings per share (EPS) dipped 14.4% year-over-year to $1.85 but beat consensus estimates by a notable 22.5%.
Fiscal Outlook: Challenges and Expectations
For the entirety of fiscal 2024, analysts project an adjusted EPS of $6.67, down 17.5% from $8.08 in fiscal 2023. However, there is a forecasted rebound in fiscal 2025, with earnings expected to rise by 12.7% year-over-year to reach $7.52 per share.
Stock Performance Shows Mixed Results
Over the past 52 weeks, WST stock has seen a slight gain of 57 basis points. This performance trails behind the Healthcare Select Sector SPDR Fund (XLV), which returned 2.2%, and the S&P 500 Index ($SPX), which surged 25% during the same time frame.
Investor Sentiment Shaken by Q4 Guidance
West Pharmaceutical started the year on a challenging note, as its stock dropped by 14.1% following the fiscal year 2023 results released on Feb. 15. The company’s guidance for 2024 indicated a modest growth target for full-year net sales at about $3 billion, an increase from the previous $2.95 billion but not sufficient to inspire confidence. Additionally, the adjusted EPS forecast of $7.50 to $7.75 reflected a decline from the $8.08 seen in 2023.
Analysts Remain Optimistic
Despite the challenges, analysts hold a positive outlook on WST. The stock currently has a consensus “Strong Buy” rating. Among the 10 analysts covering West Pharmaceutical, eight recommend “Strong Buy” while two suggest a “Hold” rating. The average price target of $379.22 indicates a 10% potential gain from current price levels.
On the date of publication, Aditya Sarawgi did not hold positions in any of the securities mentioned in this article. All information and data provided are for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
