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Parsippany, New Jersey-based Zoetis Inc. (ZTS) discovers, develops, and commercializes animal health medicines, vaccines, and diagnostic products and services. With a market cap of $75.4 billion, Zoetis operates as the largest producer of medicine and vaccines for pets and livestock in the world, with operations spanning over 100 countries in North America, Europe, and internationally.
The healthcare giant is set to announce its fourth-quarter results before the market opens on Thursday, Feb. 13. Ahead of the event, analysts expect ZTS to report a non-GAAP profit of $1.38 per share, up 11.3% from $1.24 per share reported in the year-ago quarter. While the company has surpassed Wall Street’s bottom-line projections in three of the past four quarters, it has missed the estimates on one other occasion.
For the full fiscal 2024, analysts expect Zoetis to deliver an adjusted EPS of $5.91, up 11.1% from $5.32 in fiscal 2023. While in fiscal 2025, its earnings are expected to grow nearly 8% year-over-year to $6.38 per share.
ZTS stock prices have declined 12.2% over the past 52 weeks, substantially underperforming the Healthcare Select Sector SPDR Fund’s (XLV) 1% gains and the S&P 500 Index’s ($SPX) 24.6% surge during the same time frame.
Despite reporting better-than-expected results Zoetis’ stock prices dipped 3.7% after the release of its Q3 results on Nov. 4. The company reported a robust 11% year-on-year growth in revenue, reaching $2.4 billion. Zoetis has continued to observe strong growth in the U.S. as well as international markets. Its U.S. segment reported an impressive 15% growth in revenues to $1.3 billion, driven by strong demand for companion animal products. Sales of livestock products also increased, with a 7% growth in the international segment on a reported basis and 15% operationally.
The company also reported an impressive growth in profitability with its adjusted net income growing 13.8% year-over-year, reaching $716 million and its adjusted EPS of $1.58 surpassed analysts’ earnings estimates by a notable 8.2%. Moreover, observing the robust Q3 results and underlying strength in companion animal products, Zoetis raised its full-year guidance for revenue and adjusted EPS.
The consensus opinion on ZTS stock is strongly bullish, with an overall “Strong Buy” rating. Among the 17 analysts covering the stock, 15 recommend “Strong Buy,” one advises “Moderate Buy,” and one suggests a “Hold” rating. Its mean price target of $216.53 indicates a 27.8% upside potential from current price levels.
