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:
Below please find a table outlining a discounted cash flow forecast for WST, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that West Pharmaceutical Services Inc ranked in the 22th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 67.17%. As for the metrics that stood out in our discounted cash flow analysis of West Pharmaceutical Services Inc, consider:
Interest coverage, a measure of earnings relative to interest payments, is 47.38 -- which is good for besting 92.38% of its peer stocks (US stocks in the Healthcare sector with positive cash flow).
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately merely 7.13% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
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 50.75% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GMED, OFIX, TMO, ABT, and BAX 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.