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ZTS – Market expectations are for continued Uniform ROA expansion, but management has concerns about their sales growth, market positioning, and Abaxis

January 18, 2019

  • Zoetis Inc. (ZTS:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 26.8x Uniform P/E, implying bullish expectations for the firm. However, management appears concerned about their position in the animal pharmaceutical market, sales growth across key segments, and the potential of Abaxis
  • Specifically, management may be concerned about their ability to maintain operational growth, and growth in all species categories, particularly cattle pharmaceutical growth. Furthermore, management may be exaggerating their leadership position in dog anesthetics, strategic investment returns, and their current position and opportunities within parasiticide markets. Finally, management may be concerned about the potential of Abaxis, and about the integration of Abaxis in their product portfolio

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