West Pharmaceutical Services


WST

is scheduled to release second-quarter 2022 results on Jul 28, before the closing bell. In the last reported quarter, the company delivered an earnings surprise of 5.5%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 16.58%.

Q2 Estimates

Currently, the Zacks Consensus Estimate for second-quarter revenues is pegged at $752.9 million, suggesting growth of 4.1% from the year-ago reported figure. The consensus mark for earnings stands at $2.19 per share, indicating a decline of 11% from the prior-year quarter.

Factors to Note

West Pharmaceutical’s Proprietary Products business continues to exhibit sustained strength and has been an important contributor to the company’s top-line growth. In the first quarter of 2022, sales improved significantly on the back of double-digit growth in high-value products (HVP). The trend is likely to have continued in the second quarter.

Apart from this, the company is likely to have witnessed margin expansion in the aforementioned segment in the to-be-reported quarter, owing to a favorable mix of products sold (stemming from the demand in HVP), production efficiencies and higher sales price.

It continues to witness strong uptake of HVP components, which include Westar and NovaPure offerings. This momentum is likely to have been sustained in the quarter to be reported.

West Pharmaceutical has been making significant efforts to retain customers’ faith in the company amid the uncertainty triggered by the pandemic. Apart from ensuring the well-being and safety of team members worldwide, it has successfully maintained the continuity of manufacturing and supply of components to customers. This, in turn, might have favored the second-quarter performance.

Meanwhile, West Pharmaceuticals’ business is exposed to foreign currency exchange rate fluctuations, which may have weighed on its

second-quarter

performance.

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.

Earnings ESP:

West Pharmaceuticals has an Earnings ESP of -1.48%. You can uncover the best stocks to buy or sell before they’re reported with our

Earnings ESP Filter

.

Zacks Rank:

The company carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle:

Alkermes plc


ALKS

has an Earnings ESP of +300.00% and a Zacks Rank of 1. ALKS has an estimated long-term growth rate of 25.1%.

Alkermes’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 350.5%. You can see


the complete list of today’s Zacks #1 Rank stocks here.

STERIS plc


STE

has an Earnings ESP of +1.85% and is a Zacks #1 Ranked stock. STE has an earnings yield of 4.1% against the industry’s negative yield.

STERIS’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 9.2%.

HealthEquity, Inc.


HQY

has an Earnings ESP of +7.24% and a Zacks Rank of 2 at present. HQY has an estimated long-term growth rate of 20.3%.

HealthEquity’searnings surpassed estimates in two of the trailing four quarters, with the average surprise being 1.4%.

Stay on top of upcoming earnings announcements with the

Zacks Earnings Calendar

.

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