WST
West Pharmaceutical Services, Inc.
$328.03
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 104.9% above fair value
You pay
$328.03
Bear
$128.05
Fair
$160.06
Bull
$192.06
Bear
$128.05
-61.0%
$6.81 × 12x P/E
Fair
$160.06
-51.2%
$6.81 × 15x P/E
Bull
$192.06
-41.4%
$6.81 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
48.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $330.83 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $160.06 per share.
Warnings
Dividend-based valuation: $23.52 (below our primary estimate by 77%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $330.83 (from 15 analysts). Our estimate is 69% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples