WST
West Pharmaceutical Services, Inc.
$348.76
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 104.7% above fair value
You pay
$348.76
Bear
$136.31
Fair
$170.39
Bull
$204.47
Bear
$136.31
-60.9%
$6.81 × 12x P/E
Fair
$170.39
-51.1%
$6.81 × 15x P/E
Bull
$204.47
-41.4%
$6.81 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
51.2x
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 $372.13 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $170.39 per share.
Warnings
Dividend-based valuation: $23.46 (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 $372.13 (from 15 analysts). Our estimate is 72% 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