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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 $84.2 billion, Zoetis’ operations span over 100 countries in North America, Europe, and internationally.
Shares of the animal health firm have substantially underperformed the broader market over the past year. Over the past 52 weeks, ZTS surged 1.1% compared to the S&P 500 Index's ($SPX) 28.1% returns. In 2024, ZTS declined 7%, while SPX returned 17.3% on a YTD basis.
Zooming in further, ZTS has also underperformed the S&P Pharmaceuticals SPDR’s (XPH) 1.5% surge over the past 52 weeks and 4.6% gains on a YTD basis.
Despite the underperformance, shares of Zoetis rose 6% following its Q2 earnings release on Aug. 6. The company’s revenue climbed 8.3% year over year to $2.4 billion exceeding Wall Street’s expectations by 2.2%. Its adjusted EPS grew by 10.6% to $1.56, surpassing the projections by 4.7%. Additionally, for the six months that ended June 30, 2024, Zoetis reported a 49.9% annual increase in cash flow from operating activities.
For the current fiscal year, ending in December, analysts expect Zoetis to report an EPS growth of 9.8% year over year to $5.84. The company’s earnings surprise history is mixed. It surpassed the EPS estimates in three of the past four quarters while missing on another occasion.
Among the 15 analysts covering the ZTS stock, the consensus rating is a “Strong Buy.” That’s based on 14 “Strong Buy” ratings and one “Moderate Buy.”
This configuration is slightly more bullish than a month ago, with 12 analysts recommending a “Strong Buy.”
On Aug. 12, BTIG analyst Mark Massaro maintained a “Buy” rating with a price target of $225.
ZTS’ mean price target of $219.38 represents a premium of 19.5% from current price levels. The Street-high target of $248 indicates a potential upside of 35.1%.
On the date of publication, Aditya Sarawgi 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.
