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Zoetis Inc.

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Zoetis, one of the leading global animal health companies, is focused on both livestock and companion animals. The company’s companion animal business should continue to perform well. Zoetis' raised guidance for 2016, on the back of a strong performance in the first half of the year, is encouraging. 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 as it continues to focus on the strategy of acquiring complementary businesses and products. However, performance of the livestock business is concerning. Moreover, headwinds remain in the form of disease outbreaks and stiff competition in the animal health space. Pipeline setbacks remain a concern as well.

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