DCF Studio

    WST · NYQ · Healthcare

    West Pharmaceutical Services, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 124.14

    Market price

    USD 407.88

    Implied upside

    -69.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 11.1% of revenue against depreciation of 4.9%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 34.6x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 124.14-69.6%
    Exit multiple
    USD 215.79-47.1%
    Market price
    USD 407.88

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m387m775mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 3.4bnUSD 3.6bnUSD 3.8bnUSD 4.0bnUSD 4.2bnUSD 4.4bnUSD 4.5bnUSD 4.7bnUSD 4.8bnUSD 5.0bn+4.2%
    EBITUSD 782.0mUSD 828.2mUSD 873.7mUSD 917.9mUSD 960.5mUSD 1.0bnUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bn+4.2%
    NOPATUSD 641.7mUSD 679.6mUSD 717.0mUSD 753.3mUSD 788.2mUSD 821.3mUSD 852.4mUSD 881.0mUSD 906.8mUSD 929.4m+4.2%
    Add depreciation & amortisationUSD 169.1mUSD 179.1mUSD 189.0mUSD 198.5mUSD 207.7mUSD 216.5mUSD 224.7mUSD 232.2mUSD 239.0mUSD 245.0m+4.2%
    Less capital expenditureUSD -380.2mUSD -388.0mUSD -393.9mUSD -397.6mUSD -399.0mUSD -398.1mUSD -394.8mUSD -389.0mUSD -380.9mUSD -370.4m-0.3%
    Capex, % of revenue11.1%10.7%10.3%9.9%9.5%9.1%8.7%8.3%7.9%7.5%-
    Less increase in working capitalUSD -83.7mUSD -48.9mUSD -48.1mUSD -46.8mUSD -45.0mUSD -42.7mUSD -40.0mUSD -36.8mUSD -33.2mUSD -29.2m-11.0%
    Free cashflow to firmUSD 346.9mUSD 421.8mUSD 464.0mUSD 507.4mUSD 551.9mUSD 597.0mUSD 642.2mUSD 687.3mUSD 731.6mUSD 774.8m+9.3%
    Discount factor0.95580.87320.79770.72880.66580.60830.55570.50770.46380.4237-
    Present valueUSD 331.6mUSD 368.3mUSD 370.1mUSD 369.8mUSD 367.4mUSD 363.1mUSD 356.9mUSD 348.9mUSD 339.3mUSD 328.3m-
    Present Value Of The ForecastUSD 3.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.093Reported 1.139, pulled toward 1.0 (Blume)
    Cost of equity9.52%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 1272.2x interest cover. Book interest / average debt was lower, at 0.2%.
    Market capitalisationUSD 28.4bn98.9% of capital
    Total debtUSD 321.1m1.1% of capital, book value as a proxy
    Tax rate17.9%Effective, capped at statutory
    WACC9.46%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 124.14

    59% of EV

    Forecast FCFF, final year
    USD 774.8m
    Capex at depreciation, working capital in reinvestment
    USD 934.2m
    Less reinvestment at g/ROIC (14.0% of NOPAT)
    USD -131.2m
    Capitalised
    USD 803.0m
    ROIC (reported)
    17.8%
    Terminal value, undiscounted
    USD 11.8bn
    Terminal value, discounted
    USD 5.0bn
    Enterprise value
    USD 8.6bn
    Less net debt
    USD -470.2m
    Equity value
    USD 9.0bn

    Exit at 20.0x EBITDA

    Value per shareUSD 215.79

    77% of EV

    Terminal value, undiscounted
    USD 27.6bn
    Terminal value, discounted
    USD 11.7bn
    Enterprise value
    USD 15.2bn
    Less net debt
    USD -470.2m
    Equity value
    USD 15.7bn

    Spread between methods: 54%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.46%163.14168.53175.17183.49194.12
    8.46%138.74141.71145.31149.72155.17
    9.46%120.59122.19124.14126.49129.37
    10.46%106.59107.38108.36109.57111.05
    11.46%95.4895.7796.1796.7097.38

    Outlined: this model. Green text: above today's price of 407.88. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.1%4.9%20.9%
    EBIT margin26.4%22.9%71.2%
    Discount rate-9.5%4.7%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.