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Zoetis (ZTS) Suffers a Larger Drop Than the General Market: Key Insights

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In the latest trading session, Zoetis (ZTS - Free Report) closed at $155.06, marking a -4.09% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.03%. Meanwhile, the Dow lost 0.11%, and the Nasdaq, a tech-heavy index, added 0.13%.

The animal health company's stock has dropped by 1.21% in the past month, falling short of the Medical sector's gain of 1.25% and the S&P 500's gain of 0.6%.

Market participants will be closely following the financial results of Zoetis in its upcoming release. The company is forecasted to report an EPS of $1.61, showcasing a 3.21% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $2.4 billion, reflecting a 1.67% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $6.26 per share and revenue of $9.49 billion, which would represent changes of +5.74% and +2.53%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Zoetis. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. Right now, Zoetis possesses a Zacks Rank of #3 (Hold).

Investors should also note Zoetis's current valuation metrics, including its Forward P/E ratio of 25.85. This denotes a premium relative to the industry average Forward P/E of 16.43.

It is also worth noting that ZTS currently has a PEG ratio of 2.68. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Medical - Drugs industry had an average PEG ratio of 1.67.

The Medical - Drugs industry is part of the Medical sector. This group has a Zacks Industry Rank of 79, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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