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Zoetis
(NYSE:ZTS)
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Rating:68Neutral
Price Target:
$84.00
▲(11.48% Upside)
Action:Downgraded
Date:08/07/26
The score is driven primarily by strong underlying profitability and cash flow plus supportive valuation (low P/E and a ~2.7% yield). Offsetting these positives are a weak longer-term technical trend and a cautious near-term outlook from the latest earnings call, where guidance was revised down amid intensified U.S. Companion Animal competitive and pricing pressures.
Positive Factors
Cash generation
Consistently strong operating cash flow and high free cash conversion provide durable financial flexibility. Over the next 2–6 months this supports R&D, bolt‑on M&A, dividends and buybacks while cushioning earnings volatility and enabling prioritized capital allocation even if revenue lags.
Negative Factors
Companion Animal demand weakness
The largest franchise faces persistent weaker clinic visits and heightened competition, which structurally reduces volume and pricing power. As companion remains core, prolonged softness can materially depress top‑line and slow product launches' ramp over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistently strong operating cash flow and high free cash conversion provide durable financial flexibility. Over the next 2–6 months this supports R&D, bolt‑on M&A, dividends and buybacks while cushioning earnings volatility and enabling prioritized capital allocation even if revenue lags.
Read all positive factors
Zoetis Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows how revenue is distributed regionally, helping investors see whether growth is broad‑based or concentrated in a few markets, how companion‑animal versus livestock demand varies by region, and where geopolitical or trade issues could create vulnerability.
Shows how revenue is distributed regionally, helping investors see whether growth is broad‑based or concentrated in a few markets, how companion‑animal versus livestock demand varies by region, and where geopolitical or trade issues could create vulnerability.
Data provided by:
The Fly
The FlyZoetis (ZTS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.02B
Dividend Yield2.79%
Average Volume (3M)6.17M
Price to Earnings (P/E)12.3
Beta (1Y)0.34
Revenue Growth1.41%
EPS Growth4.54%
CountryUS
Employees14,500
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)6.08
Shares Outstanding413,223,600
10 Day Avg. Volume5,828,439
30 Day Avg. Volume6,170,078
Financial Highlights & Ratios
PEG Ratio2.04
Price to Book (P/B)16.75
Price to Sales (P/S)5.89
P/FCF Ratio24.44
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$91.67Price Target Upside21.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)6.41
Revenue Forecast (FY)$9.35B
Zoetis Business Overview & Revenue Model
Company Description
Zoetis Inc. stands as a global leader in animal health, focusing on the research, development, manufacturing, and commercialization of veterinary pharmaceuticals, vaccines, and diagnostic tools. Its comprehensive portfolio serves a broad spectrum ...
How the Company Makes Money
Zoetis primarily makes money by selling animal health products and related services to veterinary clinics/hospitals, distributors, retailers, and livestock producers. Its core revenue streams are: (1) Pharmaceuticals (medicines) for companion anim...
Zoetis Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Negative
The call presented a mixed picture: clear strengths in Livestock, Diagnostics, international and continued pipeline progress, plus disciplined cost and capital return actions. However, material weakness in core Companion Animal markets—especially U.S. Dermatology and parasiticides—intensified competitive promotional activity, declining clinic visits, price realization pressure from gross-to-net investments, generics, and a meaningful downward revision to full-year guidance. While the portfolio diversification and cost actions provide resilience, the near-term trends in the company’s largest franchise create significant headwinds.Positive Updates
Strong Livestock Performance
Livestock revenue grew 11% in Q2 to $731 million (U.S. Livestock up 23% to $222 million), driven by cattle and poultry demand, vaccine wins, hatchery programs, and elevated demand (e.g., New World screwworm response). Management expects mid- to high-single-digit sustainable growth for the business on a normalized basis.
Negative Updates
Companion Animal Revenue Weakness
Global Companion Animal revenue declined 6% in Q2 to $1.7 billion; U.S. Companion Animal was down 11% to $1.0 billion. Core Dermatology (Key Dermatology) declined 16% to $395 million and U.S. Dermatology declined 18% to $251 million, reflecting softer clinic visits and intensified competition.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Livestock Performance
Livestock revenue grew 11% in Q2 to $731 million (U.S. Livestock up 23% to $222 million), driven by cattle and poultry demand, vaccine wins, hatchery programs, and elevated demand (e.g., New World screwworm response). Management expects mid- to high-single-digit sustainable growth for the business on a normalized basis.
Read all positive updates
Company Guidance
Zoetis updated full‑year 2026 guidance to revenue of $9.12–9.32 billion (organic operational growth -3% to -1% year‑over‑year), adjusted net income of $2.57–2.62 billion (organic operational decline -9% to -5% Y/Y), adjusted diluted EPS of $6.15–6.25 and reported diluted EPS of $5.55–5.65. The outlook reflects Q2 results (Q2 revenue $2.5 billion, flat reported and -1% organic; adjusted net income $781 million, -2% organic), continued U.S. Companion Animal pressure offset by strength in Livestock and Diagnostics, and assumes late‑July FX rates (approximately $60–65 million adverse to revenue and ~$30 million to the bottom line). Guidance also embeds the company’s planned gross‑to‑net investments (Wetteny noted price realization for the year could be roughly 0% to -1%, potentially as much as -2% at the low end), and reflects current margin and cost actions (adjusted gross margin 72.9%, ~40 bps reported decline with ~50 bps FX headwind and ~10 bps ex‑FX expansion; adjusted operating expenses $764 million, SG&A $586 million down ~4% operationally, R&D $173 million up ~4% operationally).Zoetis Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
62
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.52B | 9.47B | 9.26B | 8.54B | 8.08B | 7.78B |
| Gross Profit | 6.75B | 6.67B | 6.40B | 5.83B | 5.48B | 5.31B |
| EBITDA | 3.87B | 4.07B | 3.87B | 3.69B | 3.36B | 3.17B |
| Net Income | 2.62B | 2.67B | 2.49B | 2.34B | 2.11B | 2.04B |
Balance Sheet | ||||||
| Total Assets | 15.08B | 15.47B | 14.24B | 14.29B | 14.93B | 13.90B |
| Cash, Cash Equivalents and Short-Term Investments | 1.68B | 2.31B | 1.99B | 2.04B | 3.58B | 3.48B |
| Total Debt | 9.24B | 9.49B | 6.74B | 6.75B | 8.09B | 6.74B |
| Total Liabilities | 11.93B | 12.14B | 9.47B | 9.29B | 10.52B | 9.36B |
| Stockholders Equity | 3.15B | 3.33B | 4.77B | 5.00B | 4.41B | 4.54B |
Cash Flow | ||||||
| Free Cash Flow | 2.37B | 2.28B | 2.30B | 1.62B | 1.33B | 1.74B |
| Operating Cash Flow | 2.89B | 2.90B | 2.95B | 2.35B | 1.91B | 2.21B |
| Investing Cash Flow | -713.00M | -748.00M | -315.00M | -777.00M | -883.00M | -458.00M |
| Financing Cash Flow | -2.28B | -1.87B | -2.66B | -3.11B | -904.00M | -1.86B |
Zoetis Technical Analysis
Negative
75.35
Price Trends
76.29
Negative
90.48
Negative
107.20
Negative
Market Momentum
-0.46
Positive
46.78
Neutral
34.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZTS, the sentiment is Negative. The current price of 75.35 is below the 20-day moving average (MA) of 75.68, below the 50-day MA of 76.29, and below the 200-day MA of 107.20, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 46.78 is Neutral, neither overbought nor oversold. The STOCH value of 34.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZTS.
Zoetis Risk Analysis
Zoetis disclosed 51 risk factors in its most recent earnings report. Zoetis reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zoetis Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $30.02B | 12.31 | 69.25% | 2.77% | 1.41% | 4.54% | |
65 Neutral | $1.39B | 14.59 | 29.49% | 1.41% | 25.98% | 199.43% | |
62 Neutral | $10.26B | 29.17 | 8.88% | 0.95% | -6.76% | -44.33% | |
61 Neutral | $11.05B | -54.37 | -3.02% | ― | 11.95% | -145.71% | |
59 Neutral | $18.87B | -45.22 | -2.79% | 2.78% | 4.92% | 87.81% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
ZTS
Zoetis
74.83
-71.38
-48.82%
RDY
Dr Reddy's Laboratories
12.15
-1.59
-11.60%
VTRS
Viatris
16.28
6.79
71.62%
PAHC
Phibro Animal Health
34.15
5.95
21.12%
ELAN
Elanco Animal Health
22.28
5.18
30.29%
Zoetis Corporate Events
Business Operations and StrategyExecutive/Board Changes
Zoetis Appoints Jay Saccaro as Executive Finance Leader
Positive
Aug 6, 2026
Zoetis announced on August 6, 2026 that James (Jay) Saccaro will become Executive Vice President, Chief Financial Officer and Chief Operating Officer effective August 17, 2026, overseeing global finance, capital allocation, investor engagement and...
Executive/Board ChangesShareholder Meetings
Zoetis Announces Board Changes and Governance Vote Results
Positive
May 22, 2026
Zoetis Inc. reported that, effective May 20, 2026, long-serving director Louise M. Parent retired from its board in line with the company’s director retirement policy, ahead of the 2026 Annual Meeting of Shareholders held the same day. At th...
Dividends
Zoetis Declares Third-Quarter 2026 Cash Dividend
Positive
May 20, 2026
On May 20, 2026, Zoetis Inc.’s board declared a third-quarter 2026 dividend of $0.53 per share. The cash dividend is scheduled to be paid on September 1, 2026, to shareholders of record as of the close of business on July 20, 2026.The decisi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.