Naughty Flicks

Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenu(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — There’s a good chance you’ve never heard of West Pharmaceutical Services (WST) . There’s an even better chance you’ve used something it makes. If you’ve ever gotten a shot, a vaccine or an injectable prescription, West was likely part of how that drug reached you. It’s one of those pharmaceutical industry names that sits quietly in the background while the household brands get all the attention. That’s the beauty of this setup. Biologics, vaccines, insulin and the new weight loss drugs all have to get packaged and delivered somehow. We don’t have to pick which drugmaker wins or whose pipeline delivers next. The GLP-1 race between Eli Lilly (LLY) and Novo Nordisk (NVO) is a nice tailwind, but it’s one of many. Whoever wins, West is selling to them. Sean’s got the fundamentals below. I’ll be back with some technical commentary and risk management. Best Stock Spotlight: West Pharmaceutical Services, Inc. (WST) Sean — West Pharmaceutical makes the packaging injectable drugs live in. Think the rubber stoppers, seals and plungers on vials and syringes, plus the auto-injectors patients use at home. These widgets are sold to the pharma and biotech companies making everything from biologics to GLP-1s. The latter of which is sending this company much higher in price. The stock peaked at $475 in September 2021, when Covid vaccine demand had customers stockpiling components, and like most biotech firms, spent the next few years working through that Covid era inventory. Revenue went nowhere ($2.83 billion in 2021 vs. $2.89 billion in 2024), diluted EPS fell from $8.67 to $6.69, and gross margin compressed from 41.5% to 34.5%. All things we don’t like to see. The bottom fell out on Feb. 13, 2025, when West guided 2025 EPS to $6.00–$6.20, miles from the $7.44 consensus. Shares fell 38% that day, the worst session in the company’s history, capping a nearly 60% peak-to-trough drawdown. Even today after a decent run, WST’s five-year annualized return sits at -2.5%. So why is price telling us this stock is back from the dead? The comeback in fundamentals (and GLP-1s) has been a shot of adrenaline in a left-for-dead stock. Q2 sales grew 13.8% to $872M and adjusted EPS rose 28.8% to $2.37, a $0.29 beat. High-value components, the premium end of the stopper and seal business, grew 19.4% and are now 49% of sales, with GLP-1s alone making up 18% of revenue. Gross margin expanded 200 bps to 37.7%. Management has raised guidance twice this year. Sales went from $3.22 billion–$3.275 billion in February to $3.345 billion–$3.38 billion, and adjusted EPS now sits at $8.85–$9.05, which is 21–24% growth. That EPS range is nearly 50% above the $6–$6.20 guide that broke the stock 19 months ago. West also sold its SmartDose 3.5mL injector business to AbbVie for about $136 million, bought back $454 million of stock in the first half of 2026, and authorized a new $1 billion buyback of roughly 4% of the current market cap. Last but not least, there’s a new CEO in the corner office too. Michel Lagarde took over as CEO on August 31, succeeding the retiring Eric Green, after serving as COO of Thermo Fisher, where he ran the majority of the company’s businesses. The stock price has noticed these developments and is acting accordingly. WST is up 37% YTD and 45% over the past year, and it’s 67% off its 52-week low of $223.83. At $373, shares trade at roughly 42x the midpoint of 2026 guidance with EPS growing north of 20%. That’s not cheap. It is well below the 55x the stock paid for 2021 earnings at the peak though, and this time the multiple sits on earnings that are rising instead of rolling over. Josh — This one’s a simple set-up. It takes out the high or it doesn’t. WST spent six months going nowhere. From last fall into the spring, the stock chopped between the mid $220s and the $290s, and the February and March lows near $225 marked the last time sellers had any real say. In late April the stock cleared the top of that range and the 50-day crossed above the 200-day soon after. The run carried it into the mid $360s by early July. Late July brought a spike to $383 that reversed hard, and the stock fell all the way to the $325 area, slicing right through the 50-day. Buyers came right back. It happened again in early September, a dip to $330 and another reclaim of the 50-day. That is buyer tenacity. Now at $369, with the 50-day rising at $352 and the 200-day at $302, the stock is within striking distance of that summer high. $383 is the level. A close above it puts WST at fresh 52-week highs. RSI is 59. Momentum reset twice this summer, first into the low 30s after the July reversal and again near 40 in early September, and both times the stock found its footing and went higher. With RSI at 59, there’s plenty of room before this gets stretched. If the stock clears $383, a push into the 70s would tell you the breakout has real force behind it. Traders can use $350 as their line in the sand. That’s where the rising 50-day sits, and it’s also the top of the August consolidation. Two levels landing in the same spot is not an accident. A close below it means the run at the summer high has stalled. In essence, you get to find out real fast if you’re wrong. Closing prices only, don’t get whipsawed intraday. Investors can anchor to the $325 to $330 zone, which has held as support twice in the last 90 days, in late July and again in early September. The 200-day is rising at $302 but sits too far below to be actionable. Below $325 on a weekly close and the buyers who defended that zone twice are done. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More