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1. Company Snapshot

1.a. Company Description

Zoetis Inc.discovers, develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally.It commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep; and companion animals comprising dogs, cats, and horses.


The company also offers vaccines, which are biological preparations to prevent diseases of the respiratory, gastrointestinal, and reproductive tracts or induce a specific immune response; anti-infectives that prevent, kill, or slow the growth of bacteria, fungi, or protozoa; and parasiticides that prevent or eliminate external and internal parasites, which include fleas, ticks, and worms.It also provides other pharmaceutical products that comprise pain and sedation, antiemetic, reproductive, and oncology products; dermatology products for itch associated with allergic conditions and atopic dermatitis; and medicated feed additives, which offer medicines to livestock.In addition, the company provides portable blood and urine analysis testing, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, including nutritionals and agribusiness services, as well as products and services in areas, such as biodevices, genetics tests, and precision animal health.


It markets its products to veterinarians, livestock producers, and retail outlets, as well as third-party veterinary distributors through its sales representatives, and technical and veterinary operations specialists.The company was founded in 1952 and is headquartered in Parsippany, New Jersey.

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1.b. Last Insights on ZTS

Zoetis Inc.'s recent performance was negatively impacted by disappointing Q3 earnings, driven by weak U.S. results, and a cut in 2025 sales guidance. Librela sales decline, fueled by social media concerns about side effects, also weighed on the stock. Additionally, slowing organic growth, especially in the United States, and macro headwinds affecting pet care spending contributed to the underperformance. The company's valuation has compressed, trading at a historically low P/E of 20, despite a strong product portfolio and robust pipeline.

1.c. Company Highlights

2. Zoetis' 2025 Earnings: A Strong Performance

Zoetis reported a robust financial performance for the full year 2025, with global revenue growing 6% on an organic operational basis to $9,500,000,000, and adjusted net income increasing 7% to $2,800,000,000. The company's earnings per share (EPS) came in at $1.48, beating analyst estimates of $1.4. The strong performance was driven by growth across the portfolio, with the Companion Animal segment growing 5% operationally, and the Livestock segment delivering 8% organic operational revenue growth.

Publication Date: Feb -13

📋 Highlights
  • Full-Year Revenue & Profit Growth:: Global revenue reached $9.5 billion (+6% organic operational), adjusted net income hit $2.8 billion (+7% organic operational).
  • Simparica Franchise Performance:: Generated $1.5 billion in revenue (+12% operational), with Trio growing 34% to $41 million in international markets.
  • Livestock Portfolio Growth:: Delivered $2.8 billion in revenue (+8% organic operational), driven by broad-based international and U.S. demand.
  • Companion Animal Diagnostics:: Achieved 13% operational growth in 2025, with Q4 growth rising to 10% due to strong international contributions.
  • 2026 Guidance:: Anticipates 3–5% organic revenue growth and 3–6% adjusted net income growth, with Simparica expected to lead growth amid competitive pressures.

Segment Performance

The Companion Animal segment was driven by the Simparica franchise, which grew 12% operationally, with double-digit performance in both the U.S. and international markets. The key dermatology franchise also contributed to the growth, with a 6% operational increase. In the Livestock segment, growth was broad-based across species and geographies, driven by consistent demand and solid execution. The company's international markets contributed 8% organic operational revenue growth, while the U.S. delivered 4% organic operational growth.

Guidance and Outlook

Zoetis expects 3% to 5% organic operational revenue growth and 3% to 6% organic operational growth in adjusted net income in 2026. The company's guidance reflects its confidence in its ability to execute across the portfolio while navigating macroeconomic and competitive pressure. The Simparica franchise is expected to lead the way in 2026, driving growth within the key franchises. The company is also expecting contributions from its pipeline starting in 2027 and 2028.

Valuation

Using the provided valuation metrics, we can assess what's priced in for Zoetis. The company's P/E Ratio stands at 20.99, indicating a relatively high valuation. However, the ROE (%) of 53.56 and ROIC (%) of 21.08 suggest strong profitability. The Dividend Yield (%) of 1.62 and Free Cash Flow Yield (%) of 4.05 also indicate a relatively attractive return profile. Analysts estimate next year's revenue growth at 5.7%, which is slightly higher than the company's guidance.

Competitive Landscape

Zoetis' management mentioned that the company has not seen significant impact from competitors, particularly in the triple combination space where Zoetis has a strong first-mover advantage. The company's strong portfolio and diversified revenue streams are expected to help it navigate the competitive landscape. As Wetteny Joseph stated, "We have not seen significant impact from competitors, particularly in the triple combination space where we have a strong first-mover advantage." This suggests that Zoetis is well-positioned to maintain its market share and drive growth in the coming year.

3. NewsRoom

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2 Unstoppable Dividend Stocks to Buy Right Now for Less Than $200

Feb -22

Source: fool.com

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Alliance Wealth Advisors LLC UT Lowers Stock Position in Zoetis Inc. $ZTS

Feb -22

Source: defenseworld.net

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Assetmark Inc. Sells 18,236 Shares of Zoetis Inc. $ZTS

Feb -21

Source: defenseworld.net

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Zoetis Inc. $ZTS Shares Acquired by BNP PARIBAS ASSET MANAGEMENT Holding S.A.

Feb -20

Source: defenseworld.net

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Public Sector Pension Investment Board Boosts Holdings in Zoetis Inc. $ZTS

Feb -19

Source: defenseworld.net

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Mairs and Power's Strategic Moves: NVIDIA Corp Sees a -1.1% Portfolio Impact

Feb -17

Source: gurufocus.com

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Zoetis Inc. $ZTS Shares Sold by Crestwood Advisors Group LLC

Feb -17

Source: defenseworld.net

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Impax U.S. Sustainable Economy Fund Q4 2025 Contributors And Detractors

Feb -16

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.93%)

6. Segments

United States (U.S.)

Expected Growth: 5.5%

Zoetis Inc.’s growth is driven by increasing pet ownership, rising demand for animal health products, and expansion into emerging markets, particularly in Latin America and Asia Pacific.

International

Expected Growth: 6.5%

Zoetis’ International segment growth is driven by increasing companion animal health spending, expanding livestock productivity, and growing demand for veterinary vaccines and diagnostics.

Unallocated Contract Manufacturing & Human Health

Expected Growth: 4.5%

Zoetis' unallocated contract manufacturing and human health products are expected to grow driven by increasing demand for outsourced manufacturing services, growth in the human health segment, and the company's expanding portfolio of products and geographies.

7. Detailed Products

Vaccines

Zoetis offers a range of vaccines for livestock, poultry, and companion animals to protect against various diseases.

Parasiticides

Zoetis provides parasiticides to control internal and external parasites in livestock, poultry, and companion animals.

Anti-Infectives

Zoetis offers anti-infective products to treat bacterial, viral, and fungal infections in animals.

Medicated Feed Additives

Zoetis provides medicated feed additives to promote animal health and productivity.

Dermatology Products

Zoetis offers dermatology products to treat skin conditions in companion animals.

Pain Management Products

Zoetis provides pain management products to alleviate pain and discomfort in animals.

Reproductive Health Products

Zoetis offers reproductive health products to improve fertility and reproductive health in animals.

Diagnostics

Zoetis provides diagnostic products and services to detect and monitor diseases in animals.

Genetic Testing

Zoetis offers genetic testing services to identify genetic traits and improve animal breeding.

8. Zoetis Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Zoetis Inc. operates in a highly competitive industry, but the threat of substitutes is moderate due to the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Zoetis Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often essential for animal health, giving it an upper hand in negotiations.

Bargaining Power Of Suppliers

Zoetis Inc. relies on a network of suppliers for raw materials and services. While the company has some bargaining power due to its size, suppliers can still exert some pressure, particularly for specialized or high-demand inputs.

Threat Of New Entrants

The animal health industry has high barriers to entry, including significant research and development costs, regulatory hurdles, and the need for specialized expertise. This limits the threat of new entrants.

Intensity Of Rivalry

The animal health industry is highly competitive, with several established players vying for market share. Zoetis Inc. faces intense competition from companies like Merck Animal Health and Elanco Animal Health.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 56.97%
Debt Cost 5.26%
Equity Weight 43.03%
Equity Cost 8.20%
WACC 6.52%
Leverage 132.38%

11. Quality Control: Zoetis Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Gilead Sciences

A-Score: 6.8/10

Value: 3.3

Growth: 3.0

Quality: 9.3

Yield: 7.0

Momentum: 9.5

Volatility: 8.3

1-Year Total Return ->

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Merck

A-Score: 6.2/10

Value: 4.6

Growth: 6.2

Quality: 8.2

Yield: 6.0

Momentum: 4.5

Volatility: 8.0

1-Year Total Return ->

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CVS Health

A-Score: 5.6/10

Value: 5.0

Growth: 3.9

Quality: 2.6

Yield: 6.0

Momentum: 9.0

Volatility: 7.3

1-Year Total Return ->

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Bristol-Myers Squibb

A-Score: 5.5/10

Value: 5.0

Growth: 3.9

Quality: 6.5

Yield: 8.0

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

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Boston Scientific

A-Score: 5.2/10

Value: 1.2

Growth: 6.6

Quality: 6.8

Yield: 0.0

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Zoetis

A-Score: 5.2/10

Value: 2.8

Growth: 6.7

Quality: 8.9

Yield: 3.0

Momentum: 2.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

126.47$

Current Price

126.47$

Potential

-0.00%

Expected Cash-Flows