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WST Q2 Earnings Preview: Will the Stock's Segmental Edge Hold Up?
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Key Takeaways
WST expects Q2 revenues of $720M-$730M and EPS of $1.50-$1.55, with organic sales up 3%-4%.
WST's Proprietary Products segment is set to grow 4.6%, led by GLP-1 demand and SmartDose platform gains.
WST's Contract Manufacturing gains from GLP-1 injectors as CGM volume winds down and new projects ramp.
West Pharmaceutical Services (WST - Free Report) is scheduled to release second-quarter 2025 results on July 24, before the opening bell. In the last reported quarter, the company delivered an earnings beat of 18.85%. WST’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 7.81%.
Q2 Estimates
Per management, the company expects second-quarter revenues to be in the range of $720 million to $730 million, implying a 3% to 4% organic sales growth. Also, second-quarter adjusted diluted earnings per share (EPS) are expected to be in the range of $1.50 to $1.55.
Currently, the Zacks Consensus Estimate for revenues is pegged at $726 million, indicating growth of 3.4% from the year-ago period’s level. The consensus mark for earnings is pinned at $1.51 per share, indicating a decline of 0.7% year over year.
Our model estimates total revenues to be $722.2 million, implying a 3.2% organic improvement year over year. The adjusted EPS is estimated to be $1.50. While the Proprietary Products segment sales are anticipated to be $583.5 million (organic growth of 4.6%), Contract-Manufactured Products segmental sales are likely to be $138.7 million. Operating profit for the Proprietary Products segment is likely to improve 6.8% whereas for the Contract-Manufactured Products segment, operating profit is likely to decline 14.2%.
Factors to Note
West Pharmaceutical delivered a solid first-quarter performance in 2025, beating both revenue and earnings expectations. With reported revenues of $698 million and earnings per share (EPS) of $1.45, the company demonstrated resilience despite industry-wide destocking challenges. As the company is poised to post second-quarter results, a segmental analysis suggests a mix of continued growth and stabilization, supported by strategic investments in high-value products (HVPs), contract manufacturing and biologics.
In the Proprietary Products segment, West is heading into the second quarter with solid demand trends, particularly for high-value offerings like GLP-1-related components and self-injection platforms. HVPs made up more than 73% of segment revenues in the first quarter, driven by continued strength in GLP-1s. The company is working through a short-term capacity constraint at one facility due to a shift in customer sourcing, which may affect near-term volumes. Pricing came in slightly softer than expected, but not materially so. While some early-quarter challenges could influence growth pacing, management remains confident in a steady pickup in volumes as the year unfolds.
Biologics, a key sub-segment within Proprietary Products, is likely to show a mixed but stable performance in the second quarter. The SmartDose platform continued to gain traction in the first quarter, and that momentum is expected to carry into the second quarter as well. However, investors should be mindful that incentive-related comparisons from the back half of 2024 could temper growth in the coming quarters. High-value component volumes in Biologics remained soft due to ongoing destocking trends, and while a more meaningful recovery is anticipated later this year, the second quarter may still reflect some of that gradual normalization. On a positive note, Annex 1 contributed more than expected in the first quarter, benefiting from favorable timing, and while that early lift may normalize in coming periods, the growing project pipeline signals a steady tailwind through the rest of the year.
In Contract Manufacturing, WST is navigating a deliberate shift in portfolio dynamics, as growth in GLP-1 auto-injectors helps offset volume declines tied to the wind-down of continuous glucose monitoring (CGM) contracts. This balancing act is expected to remain a theme through the second quarter, with revenue likely to trend stable while the mix continues to evolve. A key part of this transformation is the Dublin facility, which began early-stage commercial production earlier this year and is expected to expand its role over time. The site is being positioned not only for device manufacturing but also as a launchpad for drug-handling capabilities, which WST sees as a natural extension of its expertise. While utilization is still in its early stages, the company indicated that onboarding new drug-handling projects, which come with more attractive margin profiles and lower capital intensity, is progressing as planned. As these programs ramp, they should help smooth out transitional pressures and support a more profitable growth trajectory for the segment in the periods ahead.
However, West Pharmaceutical’s second-quarter performance is likely to reflect continued macro pressures and inventory-related dynamics, particularly in Biologics. A softer mix of lower-margin delivery devices and reduced volumes in high-margin HVP components may have weighed slightly on gross margins, though operational efficiencies and disciplined cost management likely provided some offset. The company remains focused on long-term margin improvement through automation, including progress toward its new SmartDose production line.
West Pharmaceutical Services, Inc. Price, Consensus and EPS Surprise
Our proven model predicts an earnings beat for WST this time around. The 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 exactly the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.57%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #2 at present.
Other Stocks Worth a Look
Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
GeneDx Holdings (WGS - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is slated to release second-quarter 2025 results on July 29.
WGS’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 145.82%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to increase 190.9% from the year-ago quarter figure.
Cencora (COR - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. The company is set to release third-quarter fiscal 2025 results on Aug. 6.
COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%. The Zacks Consensus Estimate for COR’s fiscal third-quarter EPS is expected to surge 13.2% from the year-ago reported figure.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #2. The company is slated to release fourth-quarter fiscal 2025 results on Aug. 12.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. The Zacks Consensus Estimate for the company’s fiscal fourth-quarter EPS is expected to increase 10.3% from the year-ago quarter figure.
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WST Q2 Earnings Preview: Will the Stock's Segmental Edge Hold Up?
Key Takeaways
West Pharmaceutical Services (WST - Free Report) is scheduled to release second-quarter 2025 results on July 24, before the opening bell. In the last reported quarter, the company delivered an earnings beat of 18.85%. WST’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 7.81%.
Q2 Estimates
Per management, the company expects second-quarter revenues to be in the range of $720 million to $730 million, implying a 3% to 4% organic sales growth. Also, second-quarter adjusted diluted earnings per share (EPS) are expected to be in the range of $1.50 to $1.55.
Currently, the Zacks Consensus Estimate for revenues is pegged at $726 million, indicating growth of 3.4% from the year-ago period’s level. The consensus mark for earnings is pinned at $1.51 per share, indicating a decline of 0.7% year over year.
Our model estimates total revenues to be $722.2 million, implying a 3.2% organic improvement year over year. The adjusted EPS is estimated to be $1.50. While the Proprietary Products segment sales are anticipated to be $583.5 million (organic growth of 4.6%), Contract-Manufactured Products segmental sales are likely to be $138.7 million. Operating profit for the Proprietary Products segment is likely to improve 6.8% whereas for the Contract-Manufactured Products segment, operating profit is likely to decline 14.2%.
Factors to Note
West Pharmaceutical delivered a solid first-quarter performance in 2025, beating both revenue and earnings expectations. With reported revenues of $698 million and earnings per share (EPS) of $1.45, the company demonstrated resilience despite industry-wide destocking challenges. As the company is poised to post second-quarter results, a segmental analysis suggests a mix of continued growth and stabilization, supported by strategic investments in high-value products (HVPs), contract manufacturing and biologics.
In the Proprietary Products segment, West is heading into the second quarter with solid demand trends, particularly for high-value offerings like GLP-1-related components and self-injection platforms. HVPs made up more than 73% of segment revenues in the first quarter, driven by continued strength in GLP-1s. The company is working through a short-term capacity constraint at one facility due to a shift in customer sourcing, which may affect near-term volumes. Pricing came in slightly softer than expected, but not materially so. While some early-quarter challenges could influence growth pacing, management remains confident in a steady pickup in volumes as the year unfolds.
Biologics, a key sub-segment within Proprietary Products, is likely to show a mixed but stable performance in the second quarter. The SmartDose platform continued to gain traction in the first quarter, and that momentum is expected to carry into the second quarter as well. However, investors should be mindful that incentive-related comparisons from the back half of 2024 could temper growth in the coming quarters. High-value component volumes in Biologics remained soft due to ongoing destocking trends, and while a more meaningful recovery is anticipated later this year, the second quarter may still reflect some of that gradual normalization. On a positive note, Annex 1 contributed more than expected in the first quarter, benefiting from favorable timing, and while that early lift may normalize in coming periods, the growing project pipeline signals a steady tailwind through the rest of the year.
In Contract Manufacturing, WST is navigating a deliberate shift in portfolio dynamics, as growth in GLP-1 auto-injectors helps offset volume declines tied to the wind-down of continuous glucose monitoring (CGM) contracts. This balancing act is expected to remain a theme through the second quarter, with revenue likely to trend stable while the mix continues to evolve. A key part of this transformation is the Dublin facility, which began early-stage commercial production earlier this year and is expected to expand its role over time. The site is being positioned not only for device manufacturing but also as a launchpad for drug-handling capabilities, which WST sees as a natural extension of its expertise. While utilization is still in its early stages, the company indicated that onboarding new drug-handling projects, which come with more attractive margin profiles and lower capital intensity, is progressing as planned. As these programs ramp, they should help smooth out transitional pressures and support a more profitable growth trajectory for the segment in the periods ahead.
However, West Pharmaceutical’s second-quarter performance is likely to reflect continued macro pressures and inventory-related dynamics, particularly in Biologics. A softer mix of lower-margin delivery devices and reduced volumes in high-margin HVP components may have weighed slightly on gross margins, though operational efficiencies and disciplined cost management likely provided some offset. The company remains focused on long-term margin improvement through automation, including progress toward its new SmartDose production line.
West Pharmaceutical Services, Inc. Price, Consensus and EPS Surprise
West Pharmaceutical Services, Inc. price-consensus-eps-surprise-chart | West Pharmaceutical Services, Inc. Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for WST this time around. The 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 exactly the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.57%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #2 at present.
Other Stocks Worth a Look
Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
GeneDx Holdings (WGS - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is slated to release second-quarter 2025 results on July 29.
WGS’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 145.82%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to increase 190.9% from the year-ago quarter figure.
Cencora (COR - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. The company is set to release third-quarter fiscal 2025 results on Aug. 6.
COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%. The Zacks Consensus Estimate for COR’s fiscal third-quarter EPS is expected to surge 13.2% from the year-ago reported figure.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #2. The company is slated to release fourth-quarter fiscal 2025 results on Aug. 12.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. The Zacks Consensus Estimate for the company’s fiscal fourth-quarter EPS is expected to increase 10.3% from the year-ago quarter figure.