West Pharmaceutical Services (WST) has a solid position in the injectable-drug containment market with "sticky recurring revenue," and the stock price has dropped to an "attractive entry point" after underwhelming Q4 results and 2025 guidance, Deutsche Bank said Friday in a note.
The stock is currently trading close to pre-pandemic levels and is at the lower end of the range over the past five to 10 years, the note said. Deutsche Bank's base case suggests a 20% internal rate of return over two years with potential returns ranging from high single digits to mid-30% based on execution and exit conditions.
"The stock can re-rate as investors regain confidence in execution on the 2025 guidance and West's return to its long-range plan," the note said.
Deutsche Bank upgraded the stock to buy from hold and lowered its price target to $250 from $275.
West Pharmaceutical shares rose 11% in recent Friday trading.
Price: 221.74, Change: +22.62, Percent Change: +11.36
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