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Zoetis' (ZTS) Companion Animal Products to Boost Revenues
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Zoetis Inc. (ZTS - Free Report) is a Florham Park, NJ-based animal health company, which is a leader in the animal health space with a focus on both livestock and companion animals. The company operates in seven major product categories, such as vaccines, anti-infectives, parasiticides, dermatology, other pharmaceutical products, medicated feed additives and animal health diagnostics. Its diversified product portfolio caters to eight core species — cattle, swine, poultry, fish and sheep (collectively, livestock) and dogs, cats and horses (collectively, companion animals).
Zoetis has been witnessing excellent growth trends in revenues and earnings per share owing to the strong performance of its companion animal products. Its key dermatology products, Apoquel and Cytopoint, have been contributing heavily to the top line, demonstrating strong uptake in both the United States and International business segments. Apoquel is approved as a control of pruritus associated with allergic dermatitis.
Year to date, shares of Zoetis have surged 24.8% against the industry’s 5.3% fall.
Image Source: Zacks Investment Research
The FDA recently approved Apoquel Chewable tablets in the United States for controlling pruritus related to allergic dermatitis and control of atopic dermatitis in dogs at least 12 months of age. The chewable version is expected to have comparable efficacy to the original Apoquel (oclacitinib tablet) after the first dose. Zoetis believes that the formulation of Apoquel Chewable has a better formulation which could enhance medication compliance and therefore improve outcomes for dogs. Hence, demand is expected to be strong.
The approval of new drugs like Simparica Trio in Europe and the United States has strengthened the company’s market-leading parasiticide portfolio for companion animals. Zoetis’ new monoclonal antibody therapies, Librela and Solensia, for osteoarthritis pain in dogs and cats also exhibited sales growth in the last reported quarter, contributing to the increased revenues.
The company continues to bolster its vaccine portfolio for livestock. In the United States, this business segment witnessed year-over-year growth in the second quarter of 2023 due to an increase in cattle product sales like Draxxin and implant product Synovex. In the International segment, the livestock business performance in the last reported quarter was relatively consistent with the year-ago figure, on a reported basis.
ZTS’ total companion animal products and livestock products portfolios are expected to witness a CAGR of 9.1% and 3.9%, respectively, over the next three years.
The company has also been expanding its business through acquisitions. Such expansion initiatives bode well for the company, thereby strengthening its position in the animal healthcare market.
However, Zoetis’ prospects for its livestock products continue to be threatened by disease outbreaks among animals.Such outbreaks may hurt regional or global sales of particular animal-derived food products or result in reduced exports of the same due to either heightened export restrictions or import prohibitions, in turn dampening demand for livestock products.
Additionally, outbreaks of highly contagious diseases near the company’s main production sites could require an immediate production halt or force the company to incur substantial additional expenses for procuring raw materials or products from elsewhere. Thus, such incidents could hurt the top line considerably. Generic competition in the poultry products market is also challenging.
Moreover, Zoetis faces stiff competition from other animal health medicine and vaccine companies like Merck Animal Health and Elanco Animal Health, which acquired Bayer’s Animal Health business in August 2020.
However, the sales of the company’s pet care and livestock products, coupled with its expansion strategies, are expected to be the key growth drivers of ZTS in the quarters ahead amid uncertainties.
In the past 90 days, the Zacks Consensus Estimate for J&J’s 2023 earnings per share has increased from $10.66 to $10.75. During the same period, the estimate for JNJ’s 2024 earnings per share has increased from $11.01 to $11.30. Year to date, shares of JNJ have lost 6.2%.
JNJ beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 5.58%.
In the past 90 days, the Zacks Consensus Estimate for Corcept’s 2023 earnings per share has gone up from 66 cents to 78 cents. The estimate for Corcept’s 2024 earnings per share has also improved from 64 cents to 83 cents. Year to date, shares of CORT have climbed 55.6% in the past month.
CORT’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 6.99%.
In the past 90 days, the Zacks Consensus Estimate for Dynavax’s 2023 loss per share has narrowed from 56 cents to 24 cents. The estimate for Dynavax’s 2024 earnings per share is currently pegged at 2 cents. Year to date, shares of DVAX have risen by 40.8%.
DVAX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 25.78%.
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Zoetis' (ZTS) Companion Animal Products to Boost Revenues
Zoetis Inc. (ZTS - Free Report) is a Florham Park, NJ-based animal health company, which is a leader in the animal health space with a focus on both livestock and companion animals. The company operates in seven major product categories, such as vaccines, anti-infectives, parasiticides, dermatology, other pharmaceutical products, medicated feed additives and animal health diagnostics. Its diversified product portfolio caters to eight core species — cattle, swine, poultry, fish and sheep (collectively, livestock) and dogs, cats and horses (collectively, companion animals).
Zoetis has been witnessing excellent growth trends in revenues and earnings per share owing to the strong performance of its companion animal products. Its key dermatology products, Apoquel and Cytopoint, have been contributing heavily to the top line, demonstrating strong uptake in both the United States and International business segments. Apoquel is approved as a control of pruritus associated with allergic dermatitis.
Year to date, shares of Zoetis have surged 24.8% against the industry’s 5.3% fall.
Image Source: Zacks Investment Research
The FDA recently approved Apoquel Chewable tablets in the United States for controlling pruritus related to allergic dermatitis and control of atopic dermatitis in dogs at least 12 months of age. The chewable version is expected to have comparable efficacy to the original Apoquel (oclacitinib tablet) after the first dose. Zoetis believes that the formulation of Apoquel Chewable has a better formulation which could enhance medication compliance and therefore improve outcomes for dogs. Hence, demand is expected to be strong.
The approval of new drugs like Simparica Trio in Europe and the United States has strengthened the company’s market-leading parasiticide portfolio for companion animals. Zoetis’ new monoclonal antibody therapies, Librela and Solensia, for osteoarthritis pain in dogs and cats also exhibited sales growth in the last reported quarter, contributing to the increased revenues.
The company continues to bolster its vaccine portfolio for livestock. In the United States, this business segment witnessed year-over-year growth in the second quarter of 2023 due to an increase in cattle product sales like Draxxin and implant product Synovex. In the International segment, the livestock business performance in the last reported quarter was relatively consistent with the year-ago figure, on a reported basis.
ZTS’ total companion animal products and livestock products portfolios are expected to witness a CAGR of 9.1% and 3.9%, respectively, over the next three years.
The company has also been expanding its business through acquisitions. Such expansion initiatives bode well for the company, thereby strengthening its position in the animal healthcare market.
However, Zoetis’ prospects for its livestock products continue to be threatened by disease outbreaks among animals.Such outbreaks may hurt regional or global sales of particular animal-derived food products or result in reduced exports of the same due to either heightened export restrictions or import prohibitions, in turn dampening demand for livestock products.
Additionally, outbreaks of highly contagious diseases near the company’s main production sites could require an immediate production halt or force the company to incur substantial additional expenses for procuring raw materials or products from elsewhere. Thus, such incidents could hurt the top line considerably. Generic competition in the poultry products market is also challenging.
Moreover, Zoetis faces stiff competition from other animal health medicine and vaccine companies like Merck Animal Health and Elanco Animal Health, which acquired Bayer’s Animal Health business in August 2020.
However, the sales of the company’s pet care and livestock products, coupled with its expansion strategies, are expected to be the key growth drivers of ZTS in the quarters ahead amid uncertainties.
Zoetis Inc. Price and Consensus
Zoetis Inc. price-consensus-chart | Zoetis Inc. Quote
Zacks Rank and Stocks to Consider
Zoetis currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the pharma/biotech sector are J&J (JNJ - Free Report) , Corcept Therapeutics (CORT - Free Report) and Dynavax Technologies (DVAX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for J&J’s 2023 earnings per share has increased from $10.66 to $10.75. During the same period, the estimate for JNJ’s 2024 earnings per share has increased from $11.01 to $11.30. Year to date, shares of JNJ have lost 6.2%.
JNJ beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 5.58%.
In the past 90 days, the Zacks Consensus Estimate for Corcept’s 2023 earnings per share has gone up from 66 cents to 78 cents. The estimate for Corcept’s 2024 earnings per share has also improved from 64 cents to 83 cents. Year to date, shares of CORT have climbed 55.6% in the past month.
CORT’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 6.99%.
In the past 90 days, the Zacks Consensus Estimate for Dynavax’s 2023 loss per share has narrowed from 56 cents to 24 cents. The estimate for Dynavax’s 2024 earnings per share is currently pegged at 2 cents. Year to date, shares of DVAX have risen by 40.8%.
DVAX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 25.78%.