West Pharmaceutical Services, Inc. WST
West Pharmaceutical Services is delivering a genuine operational recovery, with Q2 2026 revenue of $872.3M (+13.8% YoY) following Q1 2026's +21.0% YoY growth, and eight consecutive quarterly EPS beats including a 13.9% surprise in the most recent quarter. FCF margin has rebounded to 15.26% for FY2025 from 9.56% in FY2024, and smart money is modestly accumulating (fund count rising from 59 to 64 over three quarters).
However, at 47.8x trailing earnings—a 96% premium to the peer median of 24.4x—and with RSI at 69.8 signaling overbought conditions after a run to $375.87 (26% above the 200-day MA of $298.81), the market has already discounted much of this improvement. Hold for evidence that operating margins can sustainably re-expand toward the mid-20% range rather than the current ~20% level, which would justify the premium multiple.
What could go wrong
- Valuation compression. WST trades at 47.8x PE vs peer median 24.4x and 7.95x PS vs peer median 2.58x; any deceleration in growth could trigger a sharp de-rating toward peer multiples.
- Margin recovery stalls. FY2025 operating margin of 20.09% remains well below the FY2021 peak of 26.8%; if gross margin does not continue recovering from 35.89% toward historical levels above 39%, the premium valuation becomes harder to justify.
- Technical overbought. RSI at 69.8 with the stock 26% above its 200-day MA ($298.81) leaves limited near-term upside and elevated pullback risk.
- Insider selling pattern. Recent insider transactions show routine option exercises at $89.64 followed by same-day sales at $345–$365, with no open-market buying; net insider activity over 24 months is positive but driven by option exercises rather than discretionary purchases.
What would change my mind
Where this comes from: quarterly_results, Q2 2026 · quarterly_results, Q1 2026 · earnings_surprises · derived_metrics. Orin's read on WST; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All WST filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $1.7B | 0.0% of fund |
| Vanguard Portfolio Management | $1.4B | 0.1% of fund |
| Fmr | $1.3B | 0.1% of fund |
| State Street | $1.2B | 0.0% of fund |
| Bank of New York Mellon | $733.7M | 0.1% of fund |
| Geode Capital Management | $680.6M | 0.0% of fund |
88 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 117 Form 4 filings, net $18.4M. Of the 50 on hand, 0 were open-market purchases and 6 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about WST
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 47.5× | 44.1× | 26.4× |
| EV/EBITDA | 31.8× | 30.3× | — |
| P/S | 7.90× | 8.27× | — |
| P/B | 8.8× | 8.9× | — |
Its P/E sits 60th percentile of its own last 5 years (+0.56σ from its own mean).
21.8%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.5B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$413
$390 – $447 · +11% against today's price
- 13 buy or overweight
- 2 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| WSTWest Pharmaceutical Services, Inc. | $26B | 47.5× | 31.8× | 36.8% | 17.0% | 19% |
| COOThe Cooper Companies, Inc. | $11B | 18.9× | 14.5× | 63.6% | 13.5% | 7% |
| DGXQuest Diagnostics Incorporated | $26B | 24.8× | 15.9× | 33.1% | 9.2% | 14% |
| INCYIncyte Corporation | $25B | 15.3× | 10.4× | 92.6% | 27.7% | 30% |
| LHLabcorp Holdings Inc. | $25B | 25.4× | 14.9× | 27.8% | 7.0% | 12% |
| STESTERIS plc | $20B | 25.5× | 12.1× | 44.4% | 13.3% | 11% |
| WATWaters Corporation | $42B | 107.0× | 52.4× | 50.8% | 3.6% | 2% |
| ZBHZimmer Biomet Holdings, Inc. | $17B | 21.7× | 12.5× | 69.9% | 9.5% | 6% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 91.5% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $93 | $330.94 · −72% | 2026-06-10 |
| Levered DCF | $98 | $330.94 · −70% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.