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:
We started the process of determining a valid price forecast for West Pharmaceutical Services Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that West Pharmaceutical Services Inc ranked in the 23th 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. 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 91.98% of its peer stocks (US stocks in the Healthcare sector with positive cash flow).
The business' balance sheet reveals debt to be 1% of the company's capital (with equity being the remaining amount). Approximately merely 7.47% 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 50.53% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
MDT, CPIX, DHR, EHC, and RHE 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.