Tuesday, March 21, 2017

The Expectations For West Pharmaceutical Look Hard To Meet

I'm accustomed to finding a lot of companies/stocks with the basic pattern of "love the company, not comfortable with the valuation on the stock," but West Pharmaceutical Services (NYSE:WST) dials that up to 11. I really like the company's strong share in biologics delivery systems/components, its overall share in components and systems for injectable drugs, and its leverage to higher-margin, higher-growth proprietary products serving a market that I believe is set for good volume growth for the long term. What I don't like is that it would appear that not even long-term annualized FCF growth in the mid-teens or a 15x forward EBITDA multiple is enough to drive a fair value above today's price.

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The Expectations For West Pharmaceutical Look Hard To Meet

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