As you might know, West Pharmaceutical Services, Inc. (NYSE:WST) just kicked off its latest quarterly results with some very strong numbers. The company beat forecasts, with revenue of US$747m, some 5.3% above estimates, and statutory earnings per share (EPS) coming in at US$1.85, 27% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from West Pharmaceutical Services' ten analysts is for revenues of US$3.06b in 2025. This would reflect an okay 6.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 8.5% to US$7.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.07b and earnings per share (EPS) of US$7.74 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.5% to US$361, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic West Pharmaceutical Services analyst has a price target of US$470 per share, while the most pessimistic values it at US$265. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that West Pharmaceutical Services' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than West Pharmaceutical Services.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for West Pharmaceutical Services. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for West Pharmaceutical Services going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
