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Zoetis Inc ZTS

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Morningstar’s Analysis

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Zoetis Starts 2021 With Strong Performance; No Change to Our Fair Value Estimate

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

Zoetis posted strong first-quarter results that remain on track with our full-year expectations. After slight adjustments to our companion animal projections and for higher expenses in the second half as normal travel patterns pick up again, we’re leaving our fair value estimate unchanged for now. The firm’s track record for successful commercialization of novel therapies, especially for companion animals, only reinforces our confidence in Zoetis’s wide economic moat. Not only has Zoetis pioneered (and continues to dominate) the dermatology market for small animals, its line up of monoclonal antibody therapies for osteoarthritis is poised to jump start the pain relief market, which has been populated mainly with NSAIDs.

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Company Profile

Business Description

Zoetis sells anti-infectives, vaccines, parasiticides, diagnostics, and other health products for animals. The firm earns slightly less than half of total revenue from production animals (cattle, pigs, poultry, and so on), and more than half from companion animal (dogs, horses, cats) products make up the other half. 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.

10 Sylvan Way
Parsippany, NJ, 07054
T +1 973 822-7000
Sector Healthcare
Industry Drug Manufacturers - Specialty & Generic
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Classic Growth
Employees 11,300