West Pharmaceutical Services, Inc. (WST): A Bull Case Theory

We came across a bullish thesis on West Pharmaceutical Services, Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on WST. West Pharmaceutical Services, Inc.'s share was trading at $227.18 as of July 11^th. WST’s trailing and forward P/E were 35.66 and 37.45 respectively according to Yahoo Finance.

West Pharmaceutical Services (WST) presents a compelling long-term investment opportunity as it transitions from a pandemic-driven surge through a normalization phase into a new era of secular growth. The recent revenue softness—down 1.9% in FY24—stems from COVID-related inventory destocking rather than any structural weakness. This has obscured the underlying momentum in West’s core high-value product (HVP) segment, which now comprises 73% of proprietary product revenue.

These components, crucial to the safe delivery of complex biologics, support a durable competitive moat rooted in regulatory entrenchment, high switching costs, and technological leadership. With the GLP-1 drug wave and rising biologics use, West's role as a critical supplier of containment and self-injection solutions positions it well for multi-year growth. The company’s post-COVID strategy, marked by $730 million in CapEx over 2023-2024, aims to capture this demand and is expected to shift into strong free cash flow generation beginning 2025, as CapEx moderates.

Despite normalized operating margins of ~20%, profitability remains structurally higher than pre-pandemic levels. Valuation models reinforce the bullish thesis: DCF and owner earnings analyses suggest intrinsic values of $310.50 and $295.75 per share, while a five-year IRR projection offers a 14.5% return. Risks include inventory volatility, regulatory hurdles, and execution on capital projects. However, the strength of West’s moat and alignment with biologic and GLP-1 megatrends offer a favorable skew.

The current market narrative underappreciates the company’s long-term cash compounding profile and strategic positioning, making WST an attractive buy for patient investors focused on quality, resilience, and structural growth.

Previously, we covered a bullish thesis on West Pharmaceutical Services, Inc. (WST) by Swiss Transparent Portfolio in May 2025, highlighting its monopoly-like position, strong secular trends, and resilient management. The stock has appreciated ~9% as fundamentals regained market recognition. OppCost shares a similar view but emphasizes valuation depth and the upcoming free cash flow inflection as CapEx normalizes.

West Pharmaceutical Services, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held WST at the end of the first quarter which was 35 in the previous quarter. While we acknowledge the potential of WST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.