What Happened?
A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Senior Health, Home Health & Hospice company Option Care Health (NASDAQ:OPCH) jumped 5%. Is now the time to buy Option Care Health? Access our full analysis report here, it’s free for active Edge members.
- Outpatient & Specialty Care company DaVita (NYSE:DVA) jumped 5%. Is now the time to buy DaVita? Access our full analysis report here, it’s free for active Edge members.
- Research Tools & Consumables company Revvity (NYSE:RVTY) jumped 4.3%. Is now the time to buy Revvity? Access our full analysis report here, it’s free for active Edge members.
- Drug Development Inputs & Services company West Pharmaceutical Services (NYSE:WST) jumped 5.1%. Is now the time to buy West Pharmaceutical Services? Access our full analysis report here, it’s free for active Edge members.
- Medical Devices & Supplies - Specialty company Bausch + Lomb (NYSE:BLCO) jumped 4.6%. Is now the time to buy Bausch + Lomb? Access our full analysis report here, it’s free for active Edge members.
Zooming In On West Pharmaceutical Services (WST)
West Pharmaceutical Services’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock gained 12.3% on the news that the company reported strong third-quarter 2025 results that surpassed analyst estimates and raised its full-year financial forecast. The company announced adjusted earnings of $1.96 per share on revenue of $804.6 million, beating Wall Street's expectations of $1.69 per share and $787.7 million, respectively. Sales grew 7.7% compared to the same period in the previous year. Bolstered by these results, West Pharmaceutical lifted its full-year 2025 guidance, raising the midpoint for sales to $3.07 billion and for adjusted earnings to $7.09 per share. The strong performance, particularly the significant earnings beat and improved outlook, reassured investors about the company's profitability and operational stability.
West Pharmaceutical Services is down 17.4% since the beginning of the year, and at $271.27 per share, it is trading 22% below its 52-week high of $347.87 from January 2025. Investors who bought $1,000 worth of West Pharmaceutical Services’s shares 5 years ago would now be looking at an investment worth $983.85.
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