ZTS
Zoetis Inc.$119.79
Hold
Target $146.81
Report: Mar 12, 2026Healthcare • Drug Manufacturers - Specialty & Generic • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$119.79+22.6%
Rec: HoldConviction: Medium
Entry Target
$112.93
(6% below current)
Fair Value
$146.81
(23% above current)
Stop Loss
$99.42
(17% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$172.23
52 Week Low$113.29
Avg. 3 Month Volume4.46M
Efficiency
LTM Gross Margin71.8%
LTM EBITDA Margin43.0%
LTM EBIT Margin37.8%
LTM Operating Margin37.8%
LTM ROA18.1%
LTM ROE58.2%
LTM ROIC25.7%
LTM ROCE30.2%
Capital Structure
Market Cap (MM)$49.9B
Enterprise Value (MM)$56.8B
Shares Outstanding438.17M
Total Debt (MM)$9.24B
Cash & Equivalents (MM)$2.31B
LTM Net Debt (MM)$6.93B
LTM Net Debt/EBITDA1.7x
Growth
TTM Rev. Growth2.3%
Last 3-Yr Rev. CAGR5.4%
Last 3-Yr EBITDA CAGR6.7%
Last 3-Yr EPS CAGR10.2%
Valuation
Street Target Price$143.86
LTM EV/Revenue6.0x
LTM EV/Gross Profit8.4x
LTM EV/EBIT15.9x
LTM EV/EBITDA14.0x
LTM P/E18.7x
LTM EV/FCF24.9x
LTM P/FCF21.9x
LTM P/TB4.3x
LTM P/B15.0x
Dividend Yield1.7%
Payout Ratio33.7%
Executive SummarySituation: Current price is $119.79 versus fair value $146.81 (22.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Stabilization of the Librela franchise following recent social media-driven safety concerns. Bear case centers on Moat erosion from competitive disruption in the dermatology market. Conclusion: Recommendation is Hold with Starter sizing and Long-Term horizon.
Bull Case
The secular 'humanization of pets' provides a recession-resistant floor for demand, while the Simparica franchise continues to deliver double-digit operational growth (12% in 2025). Additionally, the company's 21.6% incremental ROIC suggests that new investments in biologics and diagnostics will continue to create significant shareholder value.
Bear Case
Decelerating organic growth and competitive share losses in dermatology pose a threat to the company's premium valuation. Furthermore, safety concerns and potential litigation regarding the Librela and Solensia mAb treatments could lead to regulatory restrictions or widespread abandonment by veterinarians.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Stabilization of the Librela franchise following recent social media-driven safety concerns. Success here would validate the durability of t...
Long-Term (18+ months)Impact: Moderate
Operational launch of the new Atlanta Advanced Biologics facility. This will expand manufacturing capacity for high-margin monoclonal antibo...
Long-Term (18+ months)Impact: Moderate
Zoetis is currently relevant for analysis due to its recent growth deceleration and the market's bearish reaction to competitive launches, c...
Primary Risks
Concern: Medium
Moat erosion from competitive disruption in the dermatology market. The launch of Zenrelia and other rival products could permanently impair...
Concern: Medium
Financial risk from elevated leverage and negative tangible book value. The company's 277% Debt/Equity ratio increases its sensitivity to in...
Concern: Medium
Stewardship is generally strong, supported by a board with deep financial and life sciences expertise, including former CFOs from Pfizer and...
Recent Activity
2025-11-04SEC Filing (8-K)
-13.78%Zoetis reports Q3 2025 revenue of $2.4 billion, up 1% YoY, with 4% organic operational growth and raises full-year revenue guidance to $9.4-9.475 billion.
2025-05-06SEC Filing (8-K)
-5.18%Zoetis reports Q1 2025 results with 9% organic revenue growth and updates full-year guidance
2025-04-09Market Movement
+6.33%Market/Sector Move +6.33%
2025-02-13SEC Filing (8-K)
-5.15%Zoetis reports Q4 and full year 2024 results with strong growth and provides 2025 guidance
2024-08-06SEC Filing (8-K)
+5.99%Zoetis reports Q2 2024 results with 8% revenue growth and raises full-year guidance.
Valuation Table
9.8/10Decision Grade
Scenario Range
$99
Bear
$167
Bull
$120