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Based in Parsippany, New Jersey, Zoetis Inc. (ZTS) engages in the discovery, development, and commercialization of animal health medicines, vaccines, and diagnostic products and services. Valued at a market cap of $85.1 billion, the company caters to eight core species, including livestock such as cattle, swine, poultry, fish, and sheep, as well as companion animals comprising dogs, cats, and horses.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Zoetis fits this criterion perfectly. ZTS is the world's leading animal health company and is renowned for being one of the world's most ethical companies. It is also famous for providing unique learning and development opportunities to employees, including rotating assignments at their R&D locations in Spain and Brazil.
Despite a 7.6% decline from its 52-week high of $201.92, reached in December last year, shares of this animal health company have gained 6.1% over the past three months, surpassing the Dow Jones Industrials Average’s ($DOWI) 5% return over the same time frame.
However, longer term, ZTS stock is down 5.5% on a YTD basis, lagging behind DOWI’s 8.1% gains. Moreover, shares of ZTS have declined 2% over the past 52 weeks, underperforming DOWI’s 17.7% return over the same time frame.
Nevertheless, since May, ZTS has been trading above its 200-day and 50-day moving average, indicating a bullish trend.
Shares of ZTS fell over 7% on Apr. 12 following a Wall Street Journal suggesting a possible link between the company's arthritis treatments for dogs and cats and pet, citing thousands of adverse effect reports in the US and Europe.
However, the stock rose nearly 6% after its better-than-expected Q2 earnings release on Aug. 6, primarily driven by 12% year-over-year growth in revenues from the U.S. segment. This was fueled by an increase in sales of both- livestock as well as companion animal products. The company’s raised full-year EPS guidance further boosted investor confidence.
Furthermore, ZTS has also lagged behind its rival, Elanco Animal Health Incorporated’s (ELAN) 3% gain on a YTD basis and 27.1% return over the past 52 weeks.
Despite ZTS’s underperformance relative to the broader market, analysts remain optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 15 analysts covering the stock, and the mean price target of $219.38 suggests a 17.6% premium to its current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
