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Zoetis (ZTS) Declined More Than the Broader Markets: What You Need to Know

BusinessPersonal FinanceZoetis (ZTS) Declined More Than the Broader Markets: What You Need to Know
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In the latest trading session, Zoetis (ZTS) closed at $164.47, up -1.11% from the previous day. The change resulted in a 1.1% loss for the S&P 500 on the day. Meanwhile, the Dow shed 1.19% and the tech-heavy index Nasdaq shed 3.27%.

Heading into today, shares of the animal health company were down 4.38% over the past month, beating the medical sector’s 2.4% loss and the S&P 500’s 3.02% loss during that time.

Zoetis is looking to display strength as it nears its next earnings release. In that report, analysts expected Zoetis to post earnings of $1.31 per share. This would mark a year-on-year decline of 0.76%. Our most recent Consensus Estimate is calling for quarterly revenue of $2.06 billion, up 3.7% from the year-ago period.

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ZTS’s full-year Zacks Consensus Estimates are calling for earnings per share of $5.37 and revenue of $8.65 billion. These results would represent year-over-year changes of +10.04% and +7.06%, respectively.

It’s also important to note recent changes in analyst estimates for Zoetis. Recent revisions reflect the latest near-term business trends. As such, a positive estimates revision reflects analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to in-team stock moves. We developed Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and provides a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, externally-audited track record of success, with the #1 stock delivering an average annual return of +25% since 1988. Zacks’ Consensus EPS estimate has decreased 0.02% within the past month. Zoetis currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Zoetis currently has a forward P/E ratio of 30.95. For comparison, its industry average forward P/E is 12.86, meaning Zoetis is trading at a premium to the group.

We can also see that ZTS currently has a PEG ratio of 2.58. This metric is used in a similar way to the well-known P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. As of yesterday’s close, the average PEG ratio for the pharmaceutical industry currently stands at 1.22.

Medicine – The pharmaceutical industry is part of the medical field. The industry currently has a Zacks Industry Rank of 91, placing it in the top 37% of all 250+ industries.

The Zacks Industry Rank lists individual companies within each of these sectors in order from best to worst in terms of average Zacks Ranks. Our research shows that the top 50% of rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and many more, at Zacks.com.

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Jax Investment Research

The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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