West Pharmaceutical Services Inc. (NYSE:WST) is one of the most oversold S&P 500 stocks so far in 2025. On June 24, Barclays analyst Luke Sergott began coverage on West Pharmaceutical Services (WST) with an Equal Weight rating and a price target of $245. In his view, while the company maintains a solid foothold in its core High-Value Products (HVP) segment, recent performance has been weighed down by challenges in its smaller, non-core areas.
Specifically, Sergott points to issues in SmartDose and continuous glucose monitoring (CGM) manufacturing, which have had a disproportionate impact despite their relatively small size compared to the overall business. These segments have faced operational and growth hurdles, which have dragged on sentiment, even though they don’t represent West’s primary revenue drivers.
A pharmacist holding a vial of a pharmaceutical product manufactured by West Pharmaceuticals.
What stands out more, however, is the longer-term risk highlighted by the analyst: the potential disruption that could be posed by the development of oral GLP-1 treatments. As GLP-1 therapies shift toward oral formulations, the demand for some of West’s injectable delivery systems could face pressure. Sergott flags this trend as a key factor to watch, given the strategic implications it may have for the company’s core product lines over time.
If we talk about future growth, the company views the HVP segment as a key driver, as it contributes approximately 60% of revenue and over 75% of gross profit. Between the various businesses in this segment, revenue is expected to rise by mid-single digits to high single digits over the long term.
West Pharmaceutical Services Inc. (NYSE:WST) delivers value-added solutions throughout the drug development and delivery process. The company specializes in the development and manufacturing of injectable drug delivery systems, high-performance packaging components, and the development of innovative delivery technologies. It also offers contract laboratory and analytical services to support pharmaceutical and biotech partners worldwide.
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Disclosure: None. This article is originally published at Insider Monkey.
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