WST Q4 Earnings Preview: Can HVP Momentum Continue to Drive Margins?

West Pharmaceutical Services WST is scheduled to release fourth-quarter 2025 results on Feb. 12, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 17.37%. WST’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 15.52%.

Q4 Estimates

Per management, the company expects fourth-quarter revenues to be in the range of $790-$800 million, implying 1-2.3% organic sales growth. Also, adjusted diluted earnings per share (EPS) are expected to be in the range of $1.81-$1.86.

Currently, the Zacks Consensus Estimate for revenues is pegged at $794.3 million, indicating growth of 6.1% year over year. The consensus mark for earnings is pinned at $1.83 per share, indicating an improvement of 0.6%.

Our model estimates total revenues to be $792.7 million, implying a 2.5% organic improvement year over year. The adjusted EPS is estimated to be $1.82. While the Proprietary Products segment sales are anticipated to be $645.3 million (organic growth of 1.9%), Contract-Manufactured Products segmental sales are likely to be $147.4 million. Operating profit for the Proprietary Products segment is likely to improve 2.2%, while the metric for the Contract-Manufactured Products is estimated to decline 13.9%.

Factors to Note

Sales in the fourth quarter are likely to have been driven by continued demand for West Pharmaceutical’s high-value product (HVP) portfolio. The higher margin in the HVP components is likely to have benefited gross margin. On its third-quarter earnings call, the company raised its growth estimate for the full year by 50 basis points for its HVP portfolio, implying continued strength. The company expects an unfavorable tariff impact of $15-$20 million for the full year.

West Pharmaceutical operates under two segments — Proprietary Products and Contract-Manufactured Products. The company’s Proprietary Products segment includes the HVP Components business, the HVP Delivery Devices business, and the Standard Products business, which cater to a wide range of medical companies developing and commercializing drugs, biologics, generics and biosimilars.

The HVP Components business generated 48% of total sales during the third quarter of 2025, registering organic growth of 13.3% year over year. This was driven by strong demand for GLP-1s, HVP upgrades and improving performance in biologics.

We expect a similar trend to have continued in the fourth quarter as well, despite constraints at its HVP manufacturing site in Germany. The company recorded a $25 million incentive in the fourth quarter of 2024 for its HVP delivery device business. This is likely to have been absent in the to-be-reported quarter, potentially driving sales down year over year.

However, growth in sales of products using laminated technology and strength in Westar and Envision should have partially offset the loss of incentive. The company’s initiative to drive down cost for SmartDose 3.5 should have benefited gross margin for the Proprietary Products segment.

Meanwhile, the Standard Products business is likely to have continued its moderate growth despite an acceleration in HVP upgrades on the back of the implementation of Annex 1 regulation in Europe. WST is focusing on converting its Standard Product business, which generated 20% of total sales in the third quarter, to HVP components. Any conversion should have improved margin for the Proprietary Products segment.

The company’s Contract Manufacturing segment sales should have benefited during the fourth quarter on the back of continued demand for self-injected devices for obesity and diabetes. A potential improvement in pricing should have benefited sales further. A likely lower demand for healthcare diagnostic devices might have partially offset the gains.

West Pharmaceutical Services, Inc. Price and EPS Surprise

West Pharmaceutical Services, Inc. price-eps-surprise | West Pharmaceutical Services, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for West Pharmaceutical 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 not 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 -0.78%. 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.

Stocks Worth a Look

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

Masimo MASI has an Earnings ESP of +8.04% and a Zacks Rank #2 at present. The company is set to release fourth-quarter 2025 results on Feb. 26.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 12.39%. The Zacks Consensus Estimate for MASI’s fourth-quarter EPS indicates a decline of 20.6% from the year-ago reported figure.

Merit Medical MMSI has an Earnings ESP of +2.09% and a Zacks Rank of 2 at present. The company is set to release second-quarter fiscal 2026 results on Feb. 24.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.09%. The Zacks Consensus Estimate for MMSI’s fourth-quarter EPS implies an improvement of 3.2% from the year-ago reported figure.

DexCom DXCM has an Earnings ESP of +3.08% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter 2025 results on Feb. 12.

DXCM’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 0.17%. The Zacks Consensus Estimate for DXCM’s fourth-quarter EPS calls for a gain 44.4% from the year-ago reported figure.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research