Zacks Investment Research Lowers Zoetis Inc. (ZTS) to Sell
Zoetis Inc. (NYSE:ZTS) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report released on Thursday.
According to Zacks, “Zoetis, one of the leading global animal health companies, is focused on both livestock and companion animals. Performance of the livestock business is concerning. Headwinds remain in the form of disease outbreaks and stiff competition in the animal health space. Zoetis continued to witness a decline in the U.S. sales of swine products in the second quarter of 2016 due to increased competition. Meanwhile, sales of poultry products are declining globally due to competitive pressures. Pipeline setbacks remain a concern as well. However, the company’s companion animal business should continue to perform well. Further, Zoetis’ efforts at boosting operational efficiency bode well. We are positive on Zoetis’ recent acquisition of Scandinavian Micro Biodevices, which should expand its offerings in the growing veterinary diagnostics segment of the animal health market. We expect to see more of such acquisitions/deals at the company.”
Several other analysts have also weighed in on the company. Bank of America Corp. initiated coverage on Zoetis in a report on Thursday, September 29th. They set a “buy” rating and a $60.00 price target on the stock. Credit Suisse Group AG restated an “outperform” rating and set a $60.00 price target on shares of Zoetis in a report on Tuesday, August 23rd. Argus increased their price target on Zoetis from $54.00 to $58.00 and gave the company a “below average” rating in a report on Friday, September 9th. Guggenheim restated a “positive” rating and set a $60.00 price target on shares of Zoetis in a report on Monday, August 22nd. Finally, Jefferies Group restated a “buy” rating and set a $60.00 price target on shares of Zoetis in a report on Wednesday, September 14th. Three equities research analysts have rated the stock with a sell rating, two have issued a hold rating, eight have issued a buy rating and two have given a strong buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and a consensus target price of $55.27.
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Shares of Zoetis (NYSE:ZTS) traded down 0.91% during mid-day trading on Thursday, hitting $50.95. 999,611 shares of the stock were exchanged. Zoetis has a 12 month low of $38.26 and a 12 month high of $53.14. The firm has a market cap of $25.22 billion, a P/E ratio of 39.68 and a beta of 1.01. The stock’s 50 day moving average is $51.25 and its 200 day moving average is $48.94.
Zoetis (NYSE:ZTS) last released its quarterly earnings results on Wednesday, August 3rd. The company reported $0.49 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.44 by $0.05. Zoetis had a return on equity of 77.58% and a net margin of 13.15%. The company had revenue of $1.20 billion for the quarter, compared to analyst estimates of $1.17 billion. During the same quarter in the prior year, the firm posted $0.43 EPS. Zoetis’s quarterly revenue was up 2.8% compared to the same quarter last year. Analysts expect that Zoetis will post $1.91 EPS for the current fiscal year.
The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 1st. Investors of record on Thursday, November 3rd will be given a dividend of $0.095 per share. This represents a $0.38 dividend on an annualized basis and a yield of 0.74%. The ex-dividend date of this dividend is Tuesday, November 1st. Zoetis’s payout ratio is currently 29.69%.
In related news, insider Heidi C. Chen sold 32,097 shares of the firm’s stock in a transaction dated Thursday, September 1st. The stock was sold at an average price of $50.98, for a total transaction of $1,636,305.06. Following the sale, the insider now owns 46,060 shares of the company’s stock, valued at $2,348,138.80. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, Director Michael B. Mccallister acquired 2,000 shares of the company’s stock in a transaction that occurred on Tuesday, September 6th. The shares were bought at an average cost of $51.34 per share, for a total transaction of $102,680.00. The disclosure for this purchase can be found here. Corporate insiders own 0.05% of the company’s stock.
A number of large investors have recently modified their holdings of the stock. Marlowe Partners LP increased its stake in shares of Zoetis by 23.7% in the first quarter. Marlowe Partners LP now owns 941,525 shares of the company’s stock worth $41,738,000 after buying an additional 180,645 shares during the last quarter. HBK Investments L P boosted its stake in Zoetis by 112.7% in the first quarter. HBK Investments L P now owns 573,894 shares of the company’s stock worth $25,441,000 after buying an additional 304,026 shares during the period. Parametric Risk Advisors LLC acquired a new stake in Zoetis during the first quarter worth approximately $731,000. Pictet Asset Management Ltd. boosted its stake in Zoetis by 12.4% in the first quarter. Pictet Asset Management Ltd. now owns 982,970 shares of the company’s stock worth $40,361,000 after buying an additional 108,107 shares during the period. Finally, UBS Asset Management Americas Inc. boosted its stake in Zoetis by 21.8% in the first quarter. UBS Asset Management Americas Inc. now owns 1,390,919 shares of the company’s stock worth $61,660,000 after buying an additional 249,196 shares during the period. 93.12% of the stock is currently owned by institutional investors.
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. The Company has a diversified business, marketing products across over eight core species: cattle, swine, poultry, sheep and fish (collectively, livestock), and dogs, cats and horses (collectively, companion animals), and within over five product categories: anti-infectives, vaccines, parasiticides, medicated feed additives and other pharmaceuticals.
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