Zoetis Earnings: U.S. Commercialization of Librela Is Off to a Good Start and Bolsters the Wide Moat

Zoetis posted solid third-quarter results that largely put the firm on track to meet our full-year expectations, and we’re reiterating our $170 fair value estimate. With quarterly revenue up 8% operationally, the firm benefited from continued strength in the companion animal segment (up 11%) and stabilization in the livestock category (up 3%). Importantly, last month, Zoetis kicked off U.S. commercialization of Librela for osteoarthritis in dogs, and this launch should gain steam as we head into 2024. The firm’s role in bringing this revolutionary innovation to canine arthritis and pioneering this market for feline arthritis underscores our confidence in Zoetis’s wide economic moat. Since spinning off from Pfizer, Zoetis has consistently reached commercial success with innovative therapies and preventative products and become the dominant force in animal drugs.