West Pharmaceutical Services Earnings Preview

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Investors braced for a bumpy ride ahead of West Pharmaceutical Services' (NYS: WST) earnings announcement, as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Thursday, July 28. West Pharmaceutical Services is a manufacturer of components and systems for injectable drug delivery, and plastic packaging and delivery system components for the healthcare and consumer products industries.

What analysts say:

  • Buy, sell, or hold?: Analysts generally think investors should hang on to West Pharmaceutical Services, with half rating the stock a hold. Analysts like West Pharmaceutical Services better than competitor UniSource Energy overall. Zero out of four analysts rate UniSource Energy a buy compared to one of six for West Pharmaceutical Services. While analysts still rate the stock a moderate sell, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $299.4 million in revenue this quarter. That would represent a rise of 6.3% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.67 per share. Estimates range from $0.63 to $0.71.

What our community says:
CAPS All Stars are solidly backing the stock, with 88.5% giving it an "outperform" rating. The community at large backs the All Stars, with 90.6% awarding it a rating of "outperform." Fools are gung-ho about West Pharmaceutical Services, though the message boards have been quiet lately with only 27 posts in the past 30 days. West Pharmaceutical Services' bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
West Pharmaceutical Services' income has fallen year over year by an average of 14.5%.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters:

Quarter

Q1

Q4

Q3

Q2

Gross Margin

29.8%

28.2%

27.5%

29.5%

Operating Margin

9.7%

2.1%

9.3%

10.8%

Net Margin

6.6%

2.2%

6.6%

7.7%

One final thing: If you want to keep tabs on West Pharmaceutical Services movements, and for more analysis on the company, make sure you add it to your Watchlist.

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At the time this article was published

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