West Pharmaceutical Services, Inc. (WST): A Bull Case Theory

We came across a bullish thesis on West Pharmaceutical Services, Inc. (WST) on Business Model Mastery’s Substack. In this article, we will summarize the bulls’ thesis on WST. West Pharmaceutical Services, Inc. (WST)’s share was trading at $205.59 as of 23^rd May. WST’s trailing and forward P/E were 32.27 and 33.90 respectively according to Yahoo Finance.

West Pharmaceutical Services operates at the heart of modern medicine—not as a drug developer, but as an indispensable enabler of drug delivery. Its Proprietary Products segment, comprising nearly 75% of operations, produces elastomeric stoppers, seals, plungers, and advanced self-injection systems, which are embedded in FDA and EMA regulatory filings. Once integrated, replacing these components requires a 2–3-year requalification process, making West’s products functionally irreplaceable. Its customer base includes top pharmaceutical giants, with one alone representing over 12% of sales.

These are not transactional relationships; West co-develops delivery systems years in advance of drug launches, embedding itself deep in clinical and manufacturing processes. The company’s global manufacturing footprint spans North America, Europe, and Asia-Pacific, offering identical product output across regions—creating a level of redundancy unmatched in the industry. In 2024, it invested $69.1 million in R&D, generating 170 new patents, with innovations like Crystal Zenith® containers solving glass incompatibility and cold storage issues for biologics. Even as pandemic-era margins normalized, West maintained strong profitability, driven by the high-margin Proprietary Products segment.

Its Contract Manufacturing arm, though lower margin, is equally entrenched due to early lifecycle integration with customer products. The company’s defensibility lies not just in IP or quality but in regulatory entrenchment and operational indispensability. While a shift away from injectable therapies poses a theoretical risk, current trends—particularly self-injection for chronic diseases—only deepen West’s relevance. With its unmatched regulatory moat, cleanroom capacity, and strategic integration into the global pharmaceutical infrastructure, West remains a quiet giant in healthcare, offering investors a unique and resilient opportunity.

For a deeper look into another healthcare stock, be sure to check out our article on Sanofi (SNY), wherein we summarized a bullish thesis by the same author.

West Pharmaceutical Services, Inc. (WST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held WST at the end of the first quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of WST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.