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Analysts Are Bullish on Zoetis Stock

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Bottom line

Zoetis’s (ZTS) provision for income taxes decreased from $98.0 million in the second quarter of 2017 to $55.0 million in the second quarter. The increase in operating income coupled with lower tax provisions helped Zoetis post net income of $384.0 million in the second quarter, compared with $247.0 million in the second quarter of 2017. This translated into EPS of $0.79 in the second quarter. Its EPS was $0.50 in the second quarter of 2017.

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Its current ratio, a metric of how effectively a company can meet its short-term obligations, stands at 4.4. The current ratios of its peers Bristol-Myers Squibb (BMY), Eli Lilly & Co. (LLY), Merck & Co. (MRK), and Pfizer (PFE) stand at 1.4, 1.4, 1.3, and 1.2, respectively. These current ratios indicate that Zoetis is in a better position to satisfy its short-term obligations than its peers.

Analysts’ recommendations

Of the 18 analysts covering Zoetis (ZTS) in September, 11 analysts gave Zoetis stock a “buy,” or higher rating, and seven analysts gave it a “hold” rating. The mean rating for Zoetis stock is 2.06 with a target price of $93.29. This implies an upside potential of 4.7% over Zoetis’ closing price of $93.29 on September 5.

Peers’ ratings

Bristol-Myers Squibb (BMY), Eli Lilly & Co. (LLY), Merck & Co. (MRK), and Pfizer (PFE) received mean ratings of 2.5, 2.31, 2.05, and 2.76, respectively, from analysts. Their respective target prices are $59.56, $97.47, $71.62, and $41.80, respectively.

In the final part of this series, we’ll look at Zoetis’s valuations.

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