Zoetis (ZTS)
NYSEHealth CareDrug Manufacturers - Specialty & GenericSnapshot 2026-09-04
$75.81-0.63%
Close 2026-09-04 · 1-day change
NYSEHealth CareDrug Manufacturers - Specialty & GenericSnapshot 2026-09-04
Broken: Primary pillar broken — Sustain revenue growth near guidance level: FY26 revenue guidance $9.12B-$9.32B vs $9.82B target.
Zoetis leads in pet and livestock medicine with steady revenue growth. International sales rose 17%, showing strong global demand. The company targets about $9.82 billion revenue and $6.92 EPS in 2026. It maintains a cheap valuation with a PE of 11.8 versus peers at 25.
Revenue growth is slowing with only 3% recent increase. Cost control is weak as operating income fell from $798M to $758M. Guidance was cut and analysts expect challenges ahead. Competitive pressures and delayed product stabilization risk future earnings.
The stock trades about 20% below our fair value near $96, reflecting cautious views. Analysts expect roughly 4.5% revenue growth, which aligns with our moderate outlook. The market prices in some near-term weakness but not a severe downturn.
Breaks if: operating income declines below $700 million quarterly
Breaks if: EPS falls below $6.5
international revenue growth falls below 10% YoY
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on innovation and international growth. The current thesis state is intact, supported by strong recent financial performance and ongoing management priorities.
The market appears to price ZTS as cheap compared to its peers, with a low expectations gap. However, there is a fragility due to weak execution quality, which could impact future performance.
Management has shown strong execution in driving revenue growth and expanding international segments. However, there is a mixed picture on cost management, and while the miss probability is low, the company operates in a high-miss-rate industry.
The long-term thesis hinges on management's ability to maintain guidance, the performance of sector bellwethers, and the overall health of the economy. Any cuts to guidance or worsening economic indicators could negatively impact sentiment.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the company's outlook. However, revenue growth guidance for 2026 has been cut, raising concerns. New product approvals may help drive revenue growth, but the overall growth outlook remains uncertain.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: annual revenue falls below $9.4 billion
In the next 1 to 3 years, ZTS's performance will depend on execution and external market factors. Not investment advice.