Street Calls of the Week
Investing.com - BofA Securities raised its price target on West Pharmaceutical (NYSE:WST) to $370.00 from $310.00 on Thursday, while maintaining a Buy rating on the stock. The company, currently valued at $22.04 billion, trades at a P/E ratio of 46.38, reflecting premium market positioning. According to InvestingPro analysis, the stock is currently trading above its Fair Value.
The price target increase reflects BofA’s confidence in West Pharmaceutical’s growth trajectory, with management not pushing back on approximately 6% topline growth projections for 2026. This aligns with the company’s strong financial health, as indicated by InvestingPro’s overall score of "GOOD" and robust current ratio of 2.78.
BofA noted that management addressed concerns about the continuous glucose monitoring (CGM) wind-down expected in the second half of 2026, which will create a $40 million impact year-over-year, consistent with previous estimates.
West Pharmaceutical indicated that while replacement revenue for the CGM business may not be fully one-to-one, the company is actively pursuing higher-value opportunities to backfill the expected revenue gap.
The Dublin facility is expected to continue contributing approximately $20 million, helping to offset the CGM impact, with BofA suggesting that topline growth could translate into robust margins, potentially exceeding 100 basis points year-over-year expansion.
In other recent news, West Pharmaceutical Services Inc . reported its third-quarter earnings for 2025, surpassing market expectations. The company achieved an adjusted earnings per share (EPS) of $1.96, exceeding the forecasted $1.69. Additionally, West Pharmaceutical recorded a revenue of $805 million, outpacing the predicted $786.33 million. Following these results, the company raised its full-year revenue guidance to a range of $3.06 billion to $3.07 billion. In other developments, Evercore ISI increased its price target for West Pharmaceutical from $350 to $390, maintaining an Outperform rating. The firm highlighted that its "bull thesis is coming to life" with the High-Value Product Components thesis progressing as expected. These recent developments provide a comprehensive view of the company’s strong performance and positive outlook.
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