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.
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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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