Zoetis Inc. Stock Price Targets

Comprehensive analysis of short, mid, and long-term price targets for Zoetis Inc. (ZTS).

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Give me a comprehensive price target analysis for Zoetis Inc. (ZTS).

Here is a comprehensive, data-driven view on Zoetis Inc. (ZTS) as of 2025-10-10, including the requested horizontal price-target lines drawn on the chart and a detailed fundamental, earnings, technical, and price-target analysis.

Drawing done

  • Horizontal trendlines drawn for the three price targets and extended 30 days forward:
    • Low Target: 153 (color: forest green)
    • Median Target: 189 (color: dodger blue)
    • High Target: 230 (color: orange-red)

Line details (on-chart summary)

  • Low Target line: 153, extends to 2025-11-09
  • Median Target line: 189, extends to 2025-11-09
  • High Target line: 230, extends to 2025-11-09

Executive Summary

  • Investment thesis: Zoetis remains a high-quality, cash-generative animal-health company with strong margins and a robust balance sheet, trading well below consensus price targets. The near-term sentiment shows some EPS revisions softness, but longer-term earnings power and cash generation support a meaningful re-rating toward the analyst target range.
  • Price targets (analyst consensus): Low 153, Median 189, High 230. Current price is 143.39, implying upside of roughly 7% to the Low, ~32% to the Median, and ~60% to the High over a 12-month horizon.
  • Key takeaway: The stock offers attractive upside from current levels if the company can validate EPS trajectory and maintain margin expansion, supported by solid cash flow and a respectable dividend yield.

Fundamental Analysis

  • Valuation snapshot
    • Current price: 143.39
    • Market cap: 63.55B
    • Enterprise value: 68.96B
    • Trailing P/E: 24.68
    • Forward P/E: 22.62
    • P/B: 12.79
    • ROE: 52.8%
    • ROA: 15.4%
    • Profit margin: 27.8%
    • Gross margin: 71.5%
    • Operating margin: 40.7%
    • Debt-to-equity: 137.0
    • Total cash: 1.45B
    • Total debt: 6.82B
    • Dividend yield: 1.39%
    • Five-year avg dividend yield: 0.79%
    • Beta: 0.90
  • Observations
    • Valuation looks reasonable versus peers given high gross and operating margins and strong profitability (ROE > 50% is unusually high, driven by the business mix and leverage).
    • Net leverage remains elevated (total debt ~6.82B less cash ~1.45B). Net debt around 5.37B implies modest leverage, but the EV of about 69B reflects the equity value plus net debt.
    • Dividend yield is modest but growing relative to long-run average, and the company has a history of returning capital to shareholders.
  • Financial health signals
    • Profitability is robust (gross margin ~71%, operating margin ~41%, net margin ~28%).
    • Cash generation appears solid (normalized EBITDA in recent quarters trending higher year-over-year).
    • Leverage is non-trivial, but cash flow strength typically supports debt service and dividends.

Earnings Analysis

  • Recent Earnings Summary (selected highlights)
    • 2025-06-30 (latest quarter in the summary):
      • Diluted EPS: 1.61
      • Net income (continuing operations): 718M
      • Normalized EBITDA: 1.13B
      • Revenue: 2.46B
    • Prior quarters (for context):
      • 2025-03-31 Diluted EPS: 1.41
      • 2024-12-31 Diluted EPS: 1.29
      • 2024-09-30 Diluted EPS: 1.50
      • 2024-06-30 Diluted EPS: 1.37
    • Normalized income shows a step-up in the recent quarter vs prior periods, supporting earnings quality improvements alongside steady revenue.
  • EPS Trends
    • Trailing 12-month (0y) EPS: ~6.36
    • Latest quarter (0q): 1.64
    • Forward-looking (plus 1y): ~6.88
    • Interpretation: The company has a consistent quarterly earnings base. The TTM EPS of about 6.36–6.88 implies a multi-quarter acceleration could be feasible if margins stay resilient and growth in revenue persists.
  • EPS Revisions (sentiment signal)
    • 0q period: Downgrade pressure dominates in the near term (0 up last 7 days: 0; up last 30 days: 1; down last 30 days: 7; down last 7 days: 8).
    • +1q period: Some positive revisions exist (up last 7 days: 3; up last 30 days: 3; down last 30 days: 4; down last 7 days: 4).
    • 0y period: Net modest revisions (up last 7 days: 1; up last 30 days: 2; down last 30 days: 1; down last 7 days: 1).
    • +1y period: Mixed but with some upgrades (up last 7 days: 1; up last 30 days: 2; down last 30 days: 2; down last 7 days: 0).
    • Takeaway: Near-term sentiment has been more negative than positive, but there are pockets of upgrade momentum in the forward periods. Confidence in a sustained multi-quarter EPS uplift will depend on cost discipline and revenue resilience.
  • Earnings quality
    • Revenue growth appeared solid in recent quarters with normalization in EBITDA and margin stability.
    • Profit margins are strong, with sustainability aided by operating leverage and cost controls.
    • The mix of continuing operations shows consistency in earnings power, supported by product demand in the animal health space.

Technical Analysis

  • Current price action and key levels
    • Current price: 143.39
    • The stock is trading below the 50-day moving average (MA ~149). The 50-day MA has been trending down from mid-July toward ~149 in early October, reflecting a softer near-term backdrop.
    • RSI (14) is ~42, indicating modestly weak momentum but not oversold.
    • MACD (12,26,9) is negative (~-1.7) with a weak bearish momentum signal (below the zero line) as of the latest data.
  • Moving average analysis (50-day MA)
    • The 50-day MA around 149 remains above the current price, suggesting potential near-term resistance to rebound unless price strengthens.
  • RSI and MACD
    • RSI in the low-40s signals room for upside before becoming overbought; risk of further near-term consolidation if the 50-day MA resistance persists.
    • MACD negative with a small gap to the signal line, implying ongoing near-term momentum weakness but potential for a reversal if the MACD line crosses above the signal line.
  • Implication
    • The near-term technical setup is cautious. The stock trades below the 50-day MA with a bearish MACD crossover tendency, but the solid fundamental backdrop and meaningful upside in the consensus price targets support a longer-term upside.

Analyst Consensus & Price Targets

  • Current consensus and coverage
    • Current price: 143.39
    • Number of analysts covering: 15
    • Target High: 230
    • Target Low: 153
    • Target Median: 189
    • Target Mean: ~189.22
  • Upside vs current price
    • Low target upside: ~6.8%
    • Median target upside: ~32%
    • High target upside: ~60%
  • Interpretation
    • The median and mean targets suggest a meaningful upside from current levels, but the near-term sentiment can be challenged given revisions data. The spread between the low and high targets indicates a wide potential dispersion of outcomes depending on EPS trajectory and margin execution.

Price Target Analysis (Short, Mid, Long-Term)

  • Short-Term (3 months)
    • Target: 153 (low end) to 189 (median)
    • Justification: Near-term earnings visibility remains uncertain due to EPS revision patterns, but there is a floor around the 153 level given the recent price action and the fact that the stock is still within a reasonable multiple of earnings. The low downside risk relative to the current price is modest (~+7% to 153), with the potential for a re-rating if near-term revisions stabilize and operational momentum remains intact.
    • Key drivers: Near-term earnings confirmation, stabilization of revision sentiment, dividend confidence, and any positive quarterly performance signal.
  • Mid-Term (12 months)
    • Target: 189 (median)
    • Justification: The mid-term price target aligns with consensus expectations and the implied earnings trajectory implied by the +1y EPS trend (TTM ~6.36 to ~6.88) and healthy margins. The stock could re-rate as cash flow remains strong, dividends persist, and any improvement in the EPS revision balance supports a higher multiple.
    • Key drivers: Sustained revenue growth, margin resilience, and a constructive revision environment turning neutral to positive.
  • Long-Term (3+ years)
    • Target: 230 (high)
    • Justification: A multi-year narrative around sustained margin expansion, revenue growth in animal health segments, and consistent free cash flow could push valuation toward the high target. The long-run upside would be supported by earnings power, buybacks or capital returns, and potential multiple expansion as investor confidence solidifies.
    • Key drivers: Long-term demand growth in animal health, product portfolio expansion, margin optimization, capital allocation efficiency, and potential strategic initiatives (acquisitions, partnerships) that could enhance the growth trajectory.
  • Summary table
    • Target levels: Low 153 | Median 189 | High 230
    • Current price: 143.39
    • Upside to targets: ~7% (Low) | ~32% (Median) | ~60% (High)
    • Note: The above targets are based on the provided analyst consensus numbers and do not incorporate any major new corporate announcements after 2025-10-10.

Key Risks & Opportunities

  • Key risks
    • Near-term EPS revision headwinds (0q), which could weigh on sentiment and multiple expansion.
    • Leverage level (Debt-to-Equity ~137) and net debt pressure could constrain flexibility and opportunities if cash flow falters.
    • Macroeconomic headwinds and currency moves affecting international sales could impact revenue and margins.
    • Competitive dynamics in animal health markets and regulatory environment.
  • Key opportunities
    • Strong profitability metrics (gross margin ~71%, operating margin ~41%) support durable earnings power.
    • Solid cash generation and a growing dividend can attract income-focused investors and support multiple expansion.
    • Upside catalysts include continued margin discipline, market share gains, product portfolio expansion, and potential strategic actions that enhance long-term growth.

Investment Recommendation

  • Verdict: Buy (Accumulation)
  • Time horizon: 12–24 months
  • Rationale: The consensus price targets imply a meaningful upside from the current price, particularly to the median and high targets. The near-term earnings revision signal has been more negative than positive in the 0q window, but the company’s strong profitability, cash generation, and resilient margins underpin a favorable longer-term trajectory. The stock could re-rate as revisions stabilize and earnings momentum is demonstrated, with the 189 median and 230 high targets representing strong upside potential.
  • Expected return potential (12–24 months): Approximately 25–60% upside depending on the scenario (closest anchor around mid-point targets around 32%).

Price-targets, fundamentals, and earnings references used

  • Price targets and consensus: Current price 143.39; Low 153, Median 189, High 230; Mean ~189.22; 15 analysts
  • Earnings data: Recent quarterly EPS (diluted) 1.61 (2025-06-30) vs prior quarters; 0q EPS in recent trend around 1.64; Trailing 12-month EPS ~6.36; 1-year ahead ~6.88
  • EPS revisions: 0q revisions show more downgrades (down last 7/30 days) than upgrades; +1q shows some upgrades; sentiment continues to be mixed in near term
  • Fundamental metrics: P/E 24.68 trailing, P/E 22.62 forward; Profit margin ~27.8%; Operating margin ~40.7%; ROE ~52.8%; Debt-to-equity ~137; Cash ~1.45B; Debt ~6.82B
  • Technicals (last 60 days): 50-day MA ~149; Price ~143; RSI 42; MACD negative (-1.7). The chart shows lines drawn at 153, 189, 230 to illustrate potential resistance/support bands relative to current price.

Appendix: Data-derived metrics (quick reference)

  • Price targets (endpoints):
    • Low 153
    • Median 189
    • High 230
  • Current price: 143.39
  • Analyst coverage: 15
  • Market cap / EV: 63.55B / 68.96B
  • Key profitability: Gross margin ~71.5%, Operating margin ~40.7%, Net margin ~27.8%
  • Leverage: Debt 6.82B, Cash 1.45B; Debt-to-equity ~137
  • Dividend: 1.39% yield
  • Momentum: RSI ~42, MACD negative, price below 50-day MA (~149)

If you’d like, I can supplement with scenario analysis (e.g., if EPS revisions improve, if margins expand, or if commodity/currency shifts occur) or present a sensitivity table showing upside based on different earnings growth rates and multiple assumptions.

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