West Pharmaceutical Services delivered third quarter results that surpassed Wall Street’s revenue and profit expectations, sparking a strong positive reaction in the market. Management attributed this performance to double-digit growth in High Value Product (HVP) components, particularly the elastomers supplied for GLP-1 therapies, and a robust pipeline of Annex 1 upgrade projects. CEO Eric Green highlighted the company's “trusted reputation for high-quality scale and reliability” as a key factor supporting continued momentum in its core business segments.
Is now the time to buy WST? Find out in our full research report (it’s free for active Edge members).
West Pharmaceutical Services (WST) Q3 CY2025 Highlights:
- Revenue: $804.6 million vs analyst estimates of $787.7 million (7.7% year-on-year growth, 2.1% beat)
- Adjusted EPS: $1.96 vs analyst estimates of $1.69 (16.3% beat)
- Adjusted EBITDA: $210 million vs analyst estimates of $191 million (26.1% margin, 9.9% beat)
- The company slightly lifted its revenue guidance for the full year to $3.07 billion at the midpoint from $3.05 billion
- Management raised its full-year Adjusted EPS guidance to $7.09 at the midpoint, a 5% increase
- Operating Margin: 20.8%, in line with the same quarter last year
- Market Capitalization: $20.49 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From West Pharmaceutical Services’s Q3 Earnings Call
- Paul Knight (KeyBanc Capital Markets) asked about the trajectory toward long-term 7% to 9% growth. CEO Eric Green and CFO Bob McMahon pointed to HVP components, GLP-1, and Annex 1 as primary drivers, but noted some contract transitions in 2026.
- Michael Ryskin (Bank of America) inquired about the sustainability of double-digit HVP growth and margin expansion. Green emphasized normalizing demand and a strong biologics pipeline, while McMahon expects continued margin benefits from product mix and operational efficiencies.
- Patrick Donnelly (Citi) questioned visibility into backfilling the CGM contract and longer-term margin opportunities. Green described active late-stage discussions with new customers for the facility, and McMahon highlighted potential footprint optimization.
- Daniel Markowitz (Evercore ISI) asked about headwinds and tailwinds for HVP in 2026 and the outlook for GLP-1 growth. Management expects GLP-1 to remain a growth driver, but noted that project timing and new drug launches may introduce some variability.
- Justin Bowers (Deutsche Bank) sought clarification on Annex 1 project acceleration and the revenue ramp for the Dublin facility’s drug handling business. Green confirmed that Annex 1 is driving more customer conversions and that the Dublin site’s $20 million revenue is just the initial ramp-up phase.
Catalysts in Upcoming Quarters
Looking forward, our team will monitor (1) the pace of GLP-1 elastomer adoption and its market share within overall revenues, (2) the execution and timing of Annex 1 upgrade conversions as customers progress from development to commercial production, and (3) management’s ability to backfill the CGM contract with higher-margin business. Ongoing margin expansion and successful capital deployment will also be critical milestones.
West Pharmaceutical Services currently trades at $284.85, up from $276.80 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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