Bioprocessing sector poised for growth as industry signals recovery, KeyBanc says

Investing.com - KeyBanc Capital Markets sees positive momentum in the bioprocessing sector following upbeat signals from the recent BioProcess International (BPI) conference in Boston, according to a new research note. This optimism is reflected in the market performance of key players like West Pharmaceutical Services (NYSE:WST), which InvestingPro data shows maintains a "GOOD" financial health score with a strong liquidity position.

The conference, which hosted over 250 contract development and manufacturing organizations (CDMOs) and bioprocessing suppliers, provided evidence that the industry is rebounding after COVID-related destocking slowed growth last year. KeyBanc expects the sector to resume its historical 8-10% growth rate. This aligns with West Pharmaceutical’s recent performance, showing revenue growth of 2.9% over the last twelve months.

Samsung Biologics, one of the world’s largest biologic CDMOs, plans to increase its production capacity by approximately 70% between now and 2032, representing a 9% compound annual growth rate from 2026-2032. This expansion signals broader industry growth and potentially benefits suppliers like Sartorius Stedim Biotech (EPA:SATG), Repligen (NASDAQ:RGEN), and Danaher (NYSE:DHR).

The research note highlighted that large biopharma companies and major CDMOs are benefiting from record FDA approvals and mature customer pipelines, while smaller CDMOs are stabilizing after focusing on their most promising projects. Extended lead times for fill/finish equipment were noted as positive indicators for West Pharmaceutical Services (NYSE:WST), Stevanato Group (NYSE:STVN), and Ypsomed (SWX:YPSN). According to InvestingPro, West Pharmaceutical, currently trading near its Fair Value, has caught analysts’ attention with 10 upward earnings revisions for the upcoming period. The company’s robust financial position is evidenced by its healthy current ratio of 2.78 and consistent dividend payments. Get access to 12 more exclusive ProTips and comprehensive analysis in the Pro Research Report.

KeyBanc observed that consumable demand has normalized to double-digit levels, with one private company reporting increasing lead times for tubing and connectors used in bioprocessing. The firm expects the strong second-quarter results seen across the sector to continue through 2025 and beyond. For West Pharmaceutical, with its market capitalization of $18.14 billion, this positive industry outlook could support continued growth momentum.

In other recent news, West Pharmaceutical Services Inc. reported strong financial results for the second quarter of 2025, surpassing analyst expectations. The company achieved earnings per share (EPS) of $1.84, exceeding the forecasted $1.51, and revenue of $766.5 million, which topped the anticipated $725.26 million. This performance marks a positive surprise of 21.85% in EPS and a 5.69% increase in revenue over estimates. Evercore ISI responded to these results by raising its price target for West Pharmaceutical from $275 to $350 while maintaining an Outperform rating, citing the company’s robust performance amid challenging economic conditions. KeyBanc Capital Markets maintained its Overweight rating and a price target of $325, highlighting the company’s 6.8% organic growth in the second quarter, with notable increases in its Proprietary Products segment and high-value product elastomer components. Rothschild Redburn initiated coverage with a Buy rating and a price target of $311, expressing optimism for West Pharmaceutical’s return to mid-teens EPS growth by 2026. These developments reflect a generally positive outlook from analysts on West Pharmaceutical’s future performance.

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