6. Zoetis Inc. (NYSE:ZTS)
Average Price Target Upside Potential According to Analysts: 24.12%
Number of Hedge Fund Holders: 61
Zoetis Inc. (NYSE:ZTS) is an American animal health company that discovers, develops, manufactures, and commercializes vaccines, medicines, diagnostics, and other technologies for companion animals and livestock. It is one of the world’s largest producers of medicine and vaccinations for pets and livestock.
In the second quarter of 2024, Zoetis Inc. (NYSE:ZTS) reported a revenue of $2.4 billion, an 8% increase compared to the same period in 2023. The US segment generated $1.3 billion, reflecting a 12% growth driven by strong sales of companion animal products, particularly monoclonal antibody treatments for osteoarthritis pain, such as Librela for dogs and Solensia for cats. The international segment also performed well, with revenues of $1 billion, up 4% reported and 10% operationally.
The company is committed to innovation, recently gaining approvals for new products like a combination vaccine for Atlantic Salmon in Canada and a treatment for bacterial pneumonia in cattle in Japan.
Zoetis Inc. (NYSE:ZTS) is also enhancing its diagnostic capabilities with the upcoming launch of the Vetscan Opticell, a new point-of-care hematology analyzer set to launch in the second half of 2024. This innovative device will help veterinary teams save time, reduce costs, and optimize space in clinics, leading to improved patient care. Powered by advanced AI technology, Vetscan Opticell provides accurate Complete Blood Count (CBC) analysis directly at the point of care, ensuring high-quality results without the need for traditional methods.
The company’s ability to adapt to market needs and its diverse product portfolio makes it a strong investment choice. With continuous growth in both the companion animal and livestock sectors, Zoetis Inc. (NYSE:ZTS) is poised for future success.
Over the past ten years, Zoetis Inc. (NYSE:ZTS) has grown its revenue at a compound annual growth rate (CAGR) of 6.81%, while its net income has increased at a CAGR of 16.10% during the same period. Over the past 10 years, the company has also grown its levered free cash flow at a CAGR of 17.44%.
Analysts are quite optimistic about ZTS. Their 12-month price target suggests the stock could increase by 24% from its current level.
According to Insider Monkey’s database, 61 hedge funds held stakes in Zoetis Inc. (NYSE:ZTS) in the second quarter of 2024. Polen Capital stated the following regarding Zoetis Inc. (NYSE:ZTS) in its “Polen Global Growth Strategy” second-quarter 2024 investor letter:
“We re-established a position in Zoetis Inc. (NYSE:ZTS) after holding a position from late 2017 to late 2021. Our sale came after a successful holding period and was solely driven by valuation, which we felt was stretched at the time. We had an opportunity to re-establish a position at a lower price than we sold in September 2021 despite Zoetis having a roughly 25% higher earnings base. In short, we’ve taken advantage of the recent dip in valuation to buy back what we think is an attractive safety business capable of sustaining durable low double-digit earnings growth.”
