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Zoetis Inc Class A ZTS

Morningstar Rating
$189.55 +4.93 (2.67%)
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Company Report

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.

Price vs Fair Value

ZTS is trading at a 9% premium.
Price
$184.60
Fair Value
$622.00
Uncertainty
Medium
1-Star Price
$868.90
5-Star Price
$825.00
Economic Moat
Vbgq
Capital Allocation
Vcvxvvbkt

Bulls Say, Bears Say

Bulls

Growing interest in probiotics, antibacterial peptides, and immune modulators as alternatives to antibiotics offer many targets for innovation.

Bears

Strict regulation or restriction of antibiotic use in animals could harm Zoetis' production-animal product sales.

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News

Trading Information

Previous Close Price
$184.62
Day Range
$186.14190.11
52-Week Range
$141.00194.95
Bid/Ask
$189.55 / $189.64
Market Cap
$87.08 Bil
Volume/Avg
1.2 Mil / 1.8 Mil

Key Statistics

Price/Earnings (Normalized)
35.30
Price/Sales
10.23
Dividend Yield
0.81%
Dividend Yield (Forward)
0.94%
Total Yield
2.30%

Company Profile

Zoetis sells anti-infectives, vaccines, parasiticides, diagnostics, and other health products for animals. The firm earns roughly 35% of total revenue from production animals (cattle, pigs, poultry, and so on), and nearly 65% from companion animal (dogs, horses, cats) products. Its U.S. business is heavily skewed toward companion animals, while its international business is slightly skewed toward production animals. The firm has the largest market share in the industry and was previously Pfizer's animal health unit.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Large Growth
Total Number of Employees
13,800

Competitors

Valuation

Metric
ZTS
LLY
MRK
Price/Earnings (Normalized)
35.3074.8533.57
Price/Book Value
16.7150.606.38
Price/Sales
10.2316.854.46
Price/Cash Flow
30.7378.8813.30
Price/Earnings
ZTS
LLY
MRK

Financial Strength

Metric
ZTS
LLY
MRK
Quick Ratio
1.870.580.83
Current Ratio
3.871.051.38
Interest Coverage
12.4414.877.59
Quick Ratio
ZTS
LLY
MRK

Profitability

Metric
ZTS
LLY
MRK
Return on Assets (Normalized)
17.28%10.19%7.38%
Return on Equity (Normalized)
52.16%49.42%18.18%
Return on Invested Capital (Normalized)
21.71%19.29%10.92%
Return on Assets
ZTS
LLY
MRK

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