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What's in Store for West Pharmaceutical's (WST) Q2 Earnings?

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West Pharmaceutical Services, Inc. (WST - Free Report) is scheduled to release second-quarter 2021 results on Jul 29, before the closing bell. In the last reported quarter, the company delivered an earnings surprise of 44.4%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 28.5%.

Q2 Estimates

Currently, the Zacks Consensus Estimate for second-quarter revenues is pegged at $665.6 million, suggesting growth of 26.2% from the year-ago reported figure. The consensus estimate for earnings stands at $1.74 per share, indicating an improvement of 39.2% from the prior-year quarter.

Factors to Note

West Pharmaceutical’s Proprietary Products business continues to exhibit sustained strength and has been an important contributor to the company’s top-line growth. In the first quarter, sales improved considerably on the back of double-digit growth in high-value products (HVP), coupled with strong momentum throughout all market units. The trend is likely to have continued in the second quarter.

Apart from this, the company is likely to have witnessed margin expansion in the aforementioned segment in the to-be-reported quarter, owing to favorable mix of products sold (stemming from the demand in HVP), production efficiencies and higher sales price.

West Pharmaceutical continues to see strong uptake of HVP components, which include Westar, FluroTec, Envision and NovaPure offerings along with Daikyo’s Crystal Zenith. This momentum is likely to have sustained in the quarter to be reported.

West Pharmaceutical has been making significant efforts to retain customers’ trust in the company amid the uncertainty triggered by the pandemic. Apart from ensuring the well-being and safety of team members worldwide, the company successfully maintained the continuity of manufacturing and supply of components to its customers. This, in turn, might have positively impacted the company’s second-quarter performance.

West Pharmaceutical's business is exposed to foreign currency exchange rate fluctuations, which may have weighed on the company’s second-quarter performance.

What Our Quantitative Model Suggests

Per our proven model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: West Pharmaceutical has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #2.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

HillRom Holdings, Inc. (HRC - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DaVita Inc. (DVA - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank of 3.

Avanos Medical, Inc. (AVNS - Free Report) has an Earnings ESP of +15.72% and a Zacks Rank of 3.