Zoetis’s “Positive” Rating Reaffirmed at Bank of America (ZTS)
The analysts wrote, “We are boosting our PO to $40 (from $36) on even greater conviction in our near term view on the heels of encouraging intra-quarter news flow that should bolster enthusiasm for the shares. We believe ZTS should trade more aligned with its peer group of animal health products companies. Our new PO implies 2015E P/E and EV/EBITDA multiples of 22.8x and 15.2x and is supported by our DCF valuation. While ZTS will face a difficult comp in the US (vs. US organic revenue growth of +10% in 3Q13), recent news of a new swine vaccine for PEDv (see note), accelerating QTD hospital same store sales for VCA (see note), and the building opportunity from other ongoing product launches (Georgia 08 vaccine full licensure and Engain/Actogain) should be additive, setting the stage for accelerated growth next year in the US, its largest geographic segment (40% of revenues), particularly when Apoquel, a potential blockbuster drug for atopic dermatitis in dogs, is fully ramped next year.”
Shares of Zoetis (NYSE:ZTS) opened at 35.76 on Thursday. Zoetis has a 52 week low of $28.14 and a 52 week high of $36.65. The stock’s 50-day moving average is $33.52 and its 200-day moving average is $31.37. The company has a market cap of $17.923 billion and a P/E ratio of 34.06. Zoetis also was the target of a significant increase in short interest in August. As of August 15th, there was short interest totalling 7,126,095 shares, an increase of 52.4% from the July 31st total of 4,675,373 shares. Approximately 1.4% of the company’s stock are short sold. Based on an average trading volume of 3,668,295 shares, the short-interest ratio is currently 1.9 days.
A number of other firms have also recently commented on ZTS. Analysts at Jefferies Group cut their price target on shares of Zoetis from $38.00 to $37.00 in a research note on Monday, August 11th. They now have a “buy” rating on the stock. Separately, analysts at Zacks reiterated a “neutral” rating on shares of Zoetis in a research note on Wednesday, August 6th. They now have a $34.00 price target on the stock. Finally, analysts at BMO Capital Markets cut their price target on shares of Zoetis from $37.00 to $36.00 in a research note on Wednesday, August 6th. One investment analyst has rated the stock with a sell rating, one has issued a hold rating and four have issued a buy rating to the company. The stock presently has an average rating of “Buy” and a consensus target price of $29.80.
Zoetis Inc is engaged in the discovery, development, manufacture and commercialization of animal health medicines and vaccines, with a focus on both livestock and companion animals.
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