West Pharmaceutical Services Inc

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WST : NYSE : Health Care
$92.72 up 8.7 | 10.0%
Today's Range: 88.0 - 93.78
Avg. Daily Volume: 352900.0
04/27/17 - 3:59 PM ET

Financial Analysis


WEST PHARMACEUTICAL SVSC INC's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. WEST PHARMACEUTICAL SVSC INC has strong liquidity. Currently, the Quick Ratio is 1.67 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 9.14% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)382.3359.7
EBITDA ($mil)75.770.5
EBIT ($mil)52.947.2
Net Income ($mil)39.133.4


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)203.0274.6
Total Assets ($mil)1716.71695.1
Total Debt ($mil)228.6298.2
Equity ($mil)1117.51023.9


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin38.2439.73
EBITDA Margin19.819.59
Operating Margin13.8413.12
Sales Turnover0.880.83
Return on Assets8.365.63
Return on Equity12.859.33
Debt Q4 FY16 Q4 FY15
Current Ratio2.662.14
Debt/Capital0.170.23
Interest Expense2.73.4
Interest Coverage19.5913.88


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)73.172.3
Div / share0.130.12
EPS0.520.45
Book value / share15.2914.16
Institutional Own % n/a n/a
Avg Daily Volume349244.0372501.0

Valuation


BUY. WEST PHARMACEUTICAL SVSC INC's P/E ratio indicates a discount compared to an average of 44.36 for the Health Care Equipment & Supplies industry and a significant premium compared to the S&P 500 average of 24.92. Conducting a second comparison, its price-to-book ratio of 5.36 indicates a significant premium versus the S&P 500 average of 2.99 and a premium versus the industry average of 4.93. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, WEST PHARMACEUTICAL SVSC INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WST 42.64 Peers 44.36   WST 27.28 Peers 26.92

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

WST is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WST is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WST 27.85 Peers 32.13   WST 1.37 Peers 1.15

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WST is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WST trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WST 5.36 Peers 4.93   WST 47.69 Peers 99.98

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WST is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, WST is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WST 3.97 Peers 4.94   WST 7.80 Peers 14.96

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WST is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WST significantly trails its peers on the basis of sales growth

 

 

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