West Pharmaceutical Services, Inc. (WST) Company Bio
West Pharmaceutical Services develops, manufactures, and sells components and systems for the packaging and delivery of injectable drugs, as well as delivery system components for the pharmaceutical, healthcare, and consumer products industries. The company operates through two segments, Pharmaceutical Packaging Systems and Pharmaceutical Delivery Systems. The company was founded in 1923 and is based in Exton, Pennsylvania.
WST Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for West Pharmaceutical Services Inc. To summarize, we found that West Pharmaceutical Services Inc ranked in the 25th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for West Pharmaceutical Services Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 36.38 -- which is good for besting 88.01% of its peer stocks (US stocks in the Healthcare sector with positive cash flow).
The business' balance sheet suggests that 3% of the company's capital is sourced from debt; this is greater than just 8.68% of the free cash flow producing stocks we're observing.
WST's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 58.16% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ENZ, ABT, VREX, ZBH, and BIO can be thought of as valuation peers to WST, in the sense that they are in the Healthcare sector and have a similar price forecast based on DCF valuation.