Analyst Views West Pharmaceutical's Q4 Earnings Impressive Despite Headwinds

West Pharmaceutical Services Inc WST reported Q4 2022 net sales of $708.7 million, down 3%, and organic net sales growth was 2.6%, beating the consensus of $657.17 million.
Q4 adjusted EPS of $1.77 fell 13.2% but beat the consensus of $1.38.
COVID revenue was approximately $86 million for the quarter, and it now expects COVID contributions of $85 million for the next year as part of its 2023 guidance.
EPS guidance of $7.25-$7.40 for 2023 was ahead of the Street ($7.27) and far better than investor expectations, with revenue expectations of 2.935-$2.960 billion vs. the consensus of $2.87 billion.
William Blair says the results were impressive, given the headwinds in the quarter. But the focus will be on the guide, as investor conversations over the last couple of months pointed to a $6.75-$7.00 range for EPS given the substantial revenue and profitability headwind from the $300 million COVID step-down in 2023.
West trades at 38 times the midpoint of 2023 EPS guidance, essentially in line with its 10-year average of 37.1 times and a premium to peers at about 28 times. William Blair says it is warranted given West’s resilience and growth profile. Reiterates the Outperform rating.
Price Action: WST shares are up 14.83% at $320.59 on the last check Thursday.

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