What's in Store for West Pharmaceutical (WST) in Q3 Earnings?
West Pharmaceutical Services WST is scheduled to release third-quarter 2023 results on Oct 26, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 8.21%. WST’s earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 12.47%.
Q3 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $746.9 million, indicating an improvement of 8.7% from the year-ago period’s level. The consensus mark for earnings is pinned at $1.86 per share, indicating a deterioration of 8.4% year over year.
Factors to Note
West Pharmaceutical’s Proprietary Products was an important contributor to its top-line growth in the first half of 2023. The segment is likely to have exhibited sustained strength in the second quarter as well.
Apart from this, the company is also expected to have witnessed a margin expansion in the aforementioned segment. This is due to a favorable mix of products sold (stemming from high-value products’ [HVP] demand), production efficiencies and higher sales price.
WST has been witnessing a strong uptake of HVP components, which include Westar, Envision and NovaPure offerings. This trend is likely to have continued in the quarter to be reported.
Although the top line declined during the second quarter, demand growth and a strong order book for 2023 are encouraging. The company’s raised guidance for 2023 earnings and revenues is likely to be reflected in the third-quarter results.
West Pharmaceuticals’ business is exposed to foreign currency exchange rate fluctuations that is likely to have positively impacted the company’s third-quarter performance. However, it expects COVID-related sales to decrease further after declining year over year in the past two quarters.
West Pharmaceutical Services, Inc. Price and Consensus
West Pharmaceutical Services, Inc. price-consensus-chart | West Pharmaceutical Services, Inc. Quote
What Our Quantitative Model Suggests
Per our proven model, 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. That is not the case here as you will see below.
Earnings ESP: West Pharmaceuticals has an Earnings ESP of -1.23%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
Insulet PODD has an Earnings ESP of +5.00% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s shares have lost 53.8% year to date. PODD’s earnings beat estimates in the last reported quarter. It has a four-quarter average earnings surprise of 126.94%.
IQVIA IQV has an Earnings ESP of +0.51% and a Zacks Rank of 3.
The stock has lost 2.9% year to date. IQV’s earnings beat estimates in the last reported quarter. IQVIA has a trailing four-quarter average earnings surprise of 2.26%.
DexCom DXCM has an Earnings ESP of +7.39% and a Zacks Rank of 3.
The stock has lost 16% year to date. DXCM’s earnings beat estimates in the last reported quarter. DexCom has a four-quarter average earnings surprise of 28.83%.
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DexCom, Inc. (DXCM) : Free Stock Analysis Report
West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report
Insulet Corporation (PODD) : Free Stock Analysis Report
IQVIA Holdings Inc. (IQV) : Free Stock Analysis Report
