Stock price when the opinion was issued
A bit disappointing. Headwind from near-term, cyclical pressures as economy weakens and vet visits decline. Company sees itself as defensive -- people prioritize their pets, aging population, younger generation having pets instead of children. Competition on drugs, adverse press to dog pain management drug. Still likes longer, secular trend.
Librela's actually been on the market for a while, launched in Europe before US. Debate whether it helps or does it cause adverse effects. Company still tags very strong growth for this drug, vets are still recommending it. Reports in a week or two, so we'll get more visibility. If growth stalls on this one, a negative for the stock. So far, things seem on track.
Librela is important, as company thinks it can be a blockbuster. Their other drugs are doing quite well, pipeline is healthy.
ZTS looks 'decent' with good growth expected still and a reasonable valuation. Sales and earnings are expected to show growth over the next two years. We think it is buyable and would prefer it to the much smaller and riskier PAHC.
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Our PAST TOP PICK with ZTS is progressing well. To be disciplined, we recommend trailing up the stop (from $161) to $181 at this time.