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What Analysts Recommend for Zoetis in September 2017

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What Analysts Recommend for Zoetis in September 2017 PART 1 OF 3

What Analysts Recommend for Zoetis and Peers in September 2017

Financial performance in 2Q17

In 2Q17, Zoetis reported revenues close to $1.3 billion, which is year-over-year (or YoY) growth of about 5% and YoY operational growth of around 6%. In absence of the ongoing product rationalizations, the company would have reported an even higher YoY operational revenue growth, close to 7% in 2Q17. The Companion Animal Health segment was the key driver of Zoetis’s revenue growth in 2Q17 and reported sales close to $568 million, which is 10% YoY growth on an operational basis. This performance was mainly driven by the increasing adoption of dermatology drugs, Apoquel and Cytopoint, and parasiticide Simparica. The company’s companion animal segment posted revenues close to $354 million in the US, which is YoY operational growth of around 7%. Further, the company also reported revenues worth $214 million from the sale of its companion animal products in international markets, which is YoY operational growth of 15%.

Zoetis’s livestock segment reported revenues close to $689 million in 2Q17, which is YoY operational growth of 3%. Recently launched products such as Cytopoint, Simparica, Stronghold Plus, and ongoing research programs for lifecycle innovations in the 300 existing product lines have also added significantly to the company’s revenue performance in 2Q17. As the company continues to launch new products in the US as well as in international markets such as Canada, Brazil, and Japan, there may be a positive impact on Zoetis’s stock prices as well as those of the SPDR S&P 500 ETF (SPY). Zoetis makes up about 0.15% of SPY’s total portfolio holdings.

What Analysts Recommend for Zoetis and Peers in September 2017

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Analysts’ recommendations for Zoetis

Of the 21 analysts covering Zoetis in September 2017, seven have rated the stock a “strong buy,” seven have rated it a “buy,” and seven have rated it a “hold.”

Of the 21 analysts covering Merck (MRK) in September 2017, ~62.0% have rated the company a “buy.” Approximately 64.0% of the 22 analysts covering Eli Lilly (LLY) gave it a “buy” recommendation, while 50.0% of the 26 analysts tracking Regeneron Pharmaceuticals (REGN) rated it a “buy.”

In the next article, we’ll discuss revenue growth prospects for Zoetis in greater detail.

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