10 Benjamin Graham Stocks for Defensive Investors

7. West Pharmaceutical Services, Inc. (NSYE:WST)

Number of Hedge Fund Holders: 35

West Pharmaceutical Services, Inc. (NYSE:WST) is a global leader in advanced containment and delivery systems for injectable drugs, offering proprietary packaging, drug delivery devices, and contract manufacturing. Its two segments are Proprietary Products—featuring elastomers, syringes, vials, and self-injection devices—and Contract-Manufactured Products, which designs and assembles complex devices for pharmaceutical and medical clients.

West Pharmaceutical Services, Inc. (NYSE:WST) reported Q1 2025 net sales of $698 million, with a 2.1% organic sales increase. The gross profit margin stood 33.2%. Adjusted operating profit margin increased by 20 basis points to 17.9%, while adjusted diluted EPS declined by 7.1%, though it improved by 1.4% excluding certain adjustments. The proprietary products segment, particularly in GLP-1s, showed growth, though biologics and delivery devices faced challenges. Contract manufacturing saw low single-digit growth, primarily from self-injection devices. The company has increased its full-year 2025 revenue guidance to $2.945 billion–$2.975 billion, reflecting foreign currency exchange impacts. The company expects organic sales growth of 2%–3%, unchanged from previous guidance.

West Pharmaceutical Services is addressing several key issues impacting its high-value product (HVP) outlook. While demand remains strong, a short-term constraint has occurred at one of their facilities due to a customer switching product types. This is causing delays, but the company expects a boost in HVP components in the second half of the year. Additionally, pricing has been slightly lower than anticipated, although the impact is minimal. On the geopolitical front, while tariffs and macroeconomic factors are a concern, the company has mitigated risks through strategies like passing costs to customers and regional manufacturing. They are not seeing significant changes in customer behavior or demand despite government spending cuts or healthcare concerns. The company also sees a positive growth outlook with continued demand and projects potential for future growth in AnnexOne, a high-margin initiative.