The market expects Zoetis (ZTS) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May ...

Zoetis, Inc. (ZTS) is slated to report its first-quarter 2025 earnings on May 6, 2025, before the opening bell.The Zacks Consensus Estimate for the to-be-reported quarter’s revenues is pegged at $2.19 billion. The consensus mark for earnings is pinned at $1.40 per share. (See the Zacks Earnings Calendar to stay ahead of market-making news.)Let's see how things might have shaped up for Zoetis in the soon-to-be-reported quarter.Factors to Consider Regarding ZTS’ Q1 EarningsThe veterinary drugmaker derives mos ...

Company Overview - Zoetis is a leading animal healthcare company that was spun off from Pfizer Animal Health in 2012, with annual sales of $9.3 billion [3] - The company develops and sells medicines, vaccines, diagnostics, genetic tests, and devices for treating livestock and pets [3] Industry Growth - The animal health market is projected to grow from $48 billion in 2023 to between $75 billion and $85 billion by 2033 [5] - Demand for animal protein is increasing due to global population growth, and younger generations are spending more on companion animals compared to older generations [4] Financial Performance - Zoetis has roughly doubled its annual sales over the past decade [5] - The company has consistently raised its dividend since paying its first one in 2013, with a current yield of just over 1.3% and an average annual growth rate of 21.4% over the past five years [6][7] Valuation Insights - The stock has historically traded at a high valuation, averaging a price-to-earnings (P/E) ratio of over 41 for the past decade [9] - Currently, Zoetis is at its lowest valuation on record at 27 times earnings, but it still has a PEG ratio of 2.7, indicating it may not be a bargain [12] Investment Considerations - The company is seen as a potential buy due to its strong market position and growth prospects, but investors are advised to consider gradual purchases in case of further market declines [12] - Zoetis's leadership in the expanding animal health field provides a durable growth runway for investors [8]

Company Performance - Zoetis (ZTS) closed at $152.30, reflecting a +0.92% change from the previous day, which is lower than the S&P 500's gain of 2.03% [1] - Over the past month, Zoetis shares have decreased by 7.31%, which is less than the Medical sector's decline of 8.57% and the S&P 500's drop of 5.07% [1] Upcoming Earnings - The earnings report for Zoetis is scheduled for May 6, 2025, with an expected EPS of $1.40, indicating a growth of 1.45% compared to the same quarter last year [2] - The Zacks Consensus Estimate for revenue is projected at $2.19 billion, reflecting a slight increase of 0.02% from the previous year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates predict earnings of $6.07 per share and revenue of $9.31 billion, representing increases of +2.53% and +0.55% respectively from the prior year [3] - Recent changes in analyst estimates indicate a positive outlook for Zoetis, suggesting optimism regarding the company's business and profitability [3] Valuation Metrics - Zoetis has a Forward P/E ratio of 24.85, which is a premium compared to its industry's Forward P/E of 15.31 [5] - The company has a PEG ratio of 2.64, while the Medical - Drugs industry has an average PEG ratio of 1.16 [6] Industry Ranking - The Medical - Drugs industry, which includes Zoetis, ranks in the top 24% of all industries, with a current Zacks Industry Rank of 59 [6] - The Zacks Industry Rank assesses the strength of industry groups based on the average Zacks Rank of individual stocks, indicating that top-rated industries outperform lower-rated ones by a factor of 2 to 1 [7]

Core Viewpoint - Zoetis is a leading dividend stock in the animal health sector, known for its robust business model and consistent dividend increases, making it an attractive option for income investors over the next decade [1][9]. Company Performance - Zoetis is the world's leading drugmaker focused on animal health, with a diversified product lineup across various categories, including companion animals and livestock [2]. - In 2024, Zoetis reported a revenue of $9.3 billion, reflecting an 8% year-over-year growth, with earnings per share also increasing by 8% to $5.47 [3]. Challenges and Competition - Following its earnings release, Zoetis' stock experienced a decline due to weak guidance for fiscal year 2025, primarily due to anticipated competition for key products like Apoquel [4]. - The company has faced challenges from new market entrants, such as Elanco Animal Health's Zenrelia, which could impact Apoquel's market share [4]. Long-term Growth Prospects - Despite recent setbacks, Zoetis has a strong track record of revenue growth, outpacing the industry average since 2014, indicating its ability to navigate competitive challenges [5]. - New product approvals, such as Solensia and Librela, are expected to contribute significantly to sales growth in the coming years [6]. - There remains substantial growth potential for Apoquel, with an estimated 13 million dogs not currently being treated, presenting significant sales opportunities [7]. Market Trends - The trend of pet humanization is a critical long-term tailwind for Zoetis, as younger generations increasingly view pets as family members, leading to higher spending on pet care [8]. Dividend Performance - Zoetis has consistently paid and raised its dividends since its IPO in 2013, with a remarkable 502% increase in payouts over the past decade [9]. - Although the current forward yield is 1.2%, slightly below the S&P 500 average of 1.3%, the company's conservative cash payout ratio of 34% suggests potential for future dividend increases [10]. - Despite the lower yield, Zoetis is considered a top income stock for long-term investment [11].

Core Insights - Shares in Zoetis have faced pressure following the release of its Q4 earnings report, which showed satisfactory numbers but disappointing revenue guidance for 2025 [1] - The revenue guidance for 2025 is influenced by various factors, including new market entrants and potential product approvals [2][3] Revenue Guidance Considerations - The operational organic revenue growth forecast for 2025 is projected at 6% to 8%, factoring in assumptions about new competitors entering the market [2] - The success of these new entrants remains uncertain, which could impact Zoetis' performance relative to management's expectations [2] Potential Upsides - Management's guidance does not account for products awaiting approval, with expectations for three pharmaceutical product approvals in the next 12 months, five in the next 12 to 36 months, and seven in the next 36 to 60 months [3] - The anticipated product approvals could contribute positively to revenue in 2025, with management expressing optimism about having at least one approval each year for the next several years [4] - Specifically, products targeting chronic kidney disease and oncology in dogs could open markets valued at up to $5.7 billion, representing significant growth potential for Zoetis [4]

Core Insights - Zoetis Inc. (NYSE: ZTS) is becoming increasingly affordable over time, attracting interest from investors [1] - The company has shown a consistent preference for dividend growth investing, appealing to those looking for reliable and growing dividends [1] Company Analysis - The investment journey in Zoetis began in late 2021 to early 2022, indicating a long-term interest in the company's performance [1] - The focus on dividend growth aligns with a broader strategy of value investing, suggesting a commitment to sustainable financial returns [1] Investment Position - The analyst holds a beneficial long position in Zoetis shares, indicating confidence in the company's future performance [2]

Company Performance - Zoetis (ZTS) closed at $163.03, with a slight decrease of -0.08% from the previous trading session, underperforming the S&P 500 which gained 0.08% [1] - Over the last month, Zoetis shares increased by 3.65%, outperforming the Medical sector's decline of 1.03% and the S&P 500's loss of 7.33% [1] Upcoming Earnings - The upcoming earnings release is anticipated, with expected EPS of $1.41, reflecting a 2.17% increase from the prior-year quarter [2] - Quarterly revenue is projected at $2.19 billion, up 0.12% from the year-ago period [2] Full Year Estimates - For the full year, analysts expect earnings of $6.12 per share and revenue of $9.31 billion, indicating changes of +3.38% and +0.59% respectively from last year [3] Analyst Estimates - Recent changes in analyst estimates are crucial as they reflect near-term business trends, with positive revisions indicating confidence in the company's performance [4] Zacks Rank and Valuation - Zoetis currently holds a Zacks Rank of 4 (Sell), with a Forward P/E ratio of 26.68, which is a premium compared to the industry's average Forward P/E of 17.23 [6] - The Zacks Consensus EPS estimate has shifted 0.14% upward over the past month [6] PEG Ratio - The company has a PEG ratio of 2.86, compared to the Medical - Drugs industry's average PEG ratio of 0.99 [7] Industry Ranking - The Medical - Drugs industry, part of the Medical sector, has a Zacks Industry Rank of 82, placing it in the top 33% of over 250 industries [8]

Core Insights - The individual has extensive experience in financial markets, starting from 2007, with a background in economics and equity research [1] - The role as CFO for a holding company across various industries has provided valuable insights into company management and accounting practices [1] - The focus is on identifying high-quality companies with competitive advantages that can generate compounded cash flow at fair prices [1] Company Analysis - The investment strategy emphasizes profitable businesses operating in growing sectors with high returns on capital, expanding margins, and low debt [1] - Management's commitment is a key factor in evaluating potential investments, indicating a preference for companies where management has "skin in the game" [1] - A comprehensive analysis includes the company's business model, market dynamics, competition, financials, and management [1] Valuation Approach - Valuation measures such as multiples and discounted cash flow (DCF) analysis are applied to assess expected growth [1] - The investment approach is long-term, focusing on companies capable of deploying capital at high returns on invested capital (ROIC) for several years [1]

Company Performance - Zoetis reported an outstanding performance in 2024, achieving the second highest growth rate in its public company history [4] - The major franchises in companion animal products led the growth with double-digit increases [4] - Livestock products also showed consistent growth, increasing by 5% and 6% over the last two years [4] Industry Insights - The industry is characterized as incredibly resilient and still young, presenting substantial opportunities for expansion [4] - Zoetis holds a leadership position in existing markets such as dermatology and parasiticides, particularly with the Simparica franchise [4] - There is significant potential for growth in new markets, particularly in osteoarthritis (OA) pain management, where the company is just beginning to explore opportunities [4]