NYSE:ZTS
Zoetis Inc (ZTS)
Financials 
Technical Analysis 
Jun 6, 2026, 12:00 amThis summary was created by AI, based on 5 opinions in the last 12 months.
Zoetis Inc. (ZTS) has been experiencing significant challenges, with its stock down 39% this year following a weaker performance in its last quarter. The company faced negative press regarding its new pain management drug for pets, which has been detrimental to its outlook and guidance. Despite these issues, the livestock segment shows stability and growth, especially as demand increases in developing countries. Analysts note that while pet owners are becoming more cautious in their spending, the pet care market continues to grow overall. With the stock trading at a lower valuation than historical averages, analysts see potential despite current headwinds. The consensus among experts appears to be cautious but holds a belief in the long-term viability of its offerings.
Livestock business grows at 5%, pet business has grown like gangbusters. Great products in pipeline, great chance to grow business. Great R&D.
Paul Harris, CFAIt is a higher growth name and is the world's largest player in animal care. He still likes it - people still spend money on pharmaceuticals even in a downturn.
Paul MacDonaldLong owned this. A great pipeline of products in their pet business. Fine balance sheet. People spend $3,000 annually on their pet. Their livestock business will come back. This did well during Covid, but shares fell back after. He expects strong quarters of growth ahead.
Paul Harris, CFALeads with 17% market share in animal healthcare (and livestock). Their pet business thrived during the pandemic. People continue to buy pets and are spending more on pets per capita. Recessions don't slow down pet spending.
Christine PooleVery innovative, lots of great products coming out. Pet healthcare continues to be a priority for pet owners. Anticipates 2023-24 being a really good year.
Paul Harris, CFAZTS operates as an animal health medicine, vaccine, and diagnostic product. ZTS has performed well in the last five years with consistent, stable and recurring revenue growth, and is now trading at 30x times' Forward P/E, which is at the lower end of historical averages. The balance sheet is OK, with net debt of $4.6B.
Total debt is around 2.4x times trailing twelve-month cash flow of $1.9B, and cash flow declined slightly around 14% compared to $2.2B last year largely due to investment in inventories.
Based on consensus estimates, sales are expected to grow by 8% on average over the next few years. Overall, the company has been growing, increasing dividends and repurchasing shares consistently over the last few years, the main issue is the valuation: it is trading at a premium level given the high quality of the business. W
e would be comfortable averaging into ZTS over time.
Unlock Premium - Try 5i Free
Paul Harris, CFAPaul Harris, CFA
Paul Harris, CFAChristine Poole
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20scale(-1,%201)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
They lead in pets' health. It thrived during Covid, but so did the PE, so rising rates have impacted them. However, pet ownership remains strong and even getting younger with more millennials buying pets. Clinics are open now. Spending per visit is up. They cover 8 species. Drug development for pets is shorter with less competition and longer shelf life. A new growth drug tackles ticks and fleas, and will launch a painkiller for dogs that looks promising.
(Analysts’ price target is $209.69)