Can West Pharmaceutical Services Stock Recover If Markets Fall?
West Pharmaceutical Services (WST) stock is down 15.3% in 5 trading days. The recent slide reflects concerns around its SmartDose divestiture and oral GLP-1 impact on injectables, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where West Pharmaceutical Services stands today.
- Size: West Pharmaceutical Services is a $17 Bil company with $3.0 Bil in revenue currently trading at $236.66.
- Fundamentals: Last 12 month revenue growth of 4.9% and operating margin of 20.9%.
- Liquidity: Has Debt to Equity ratio of 0.02 and Cash to Assets ratio of 0.15
- Valuation: West Pharmaceutical Services stock is currently trading at P/E multiple of 34.8 and P/EBIT multiple of 28.3
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 24.8% within a year. See WST Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Very High valuation – making the stock Unattractive. For details, see Buy or Sell WST Stock
That brings us to the key consideration for investors worried about this fall: how resilient is WST stock if markets turn south? This is where our downturn resilience framework comes in. Suppose WST stock falls another 20-30% to $166 – can investors comfortably hold on? Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- WST stock fell 55.6% from a high of $471.34 on 30 December 2021 to $209.34 on 3 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $413.00 on 7 February 2024 , and currently trades at $236.66
| WST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.6% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- WST stock fell 26.2% from a high of $174.76 on 19 February 2020 to $128.96 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 23 April 2020
| WST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -26.2% | -33.9% |
| Time to Full Recovery | 31 days | 148 days |
2018 Correction
- WST stock fell 25.0% from a high of $123.98 on 3 October 2018 to $93.00 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 28 June 2019
| WST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -25.0% | -19.8% |
| Time to Full Recovery | 186 days | 120 days |
2008 Global Financial Crisis
- WST stock fell 45.6% from a high of $25.83 on 19 September 2008 to $14.06 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 24 September 2012
| WST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.6% | -56.8% |
| Time to Full Recovery | 1,295 days | 1,480 days |
Feeling jittery about WST stock? Consider portfolio approach.
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