ZTS – Market expectations are for record-high Uniform ROA, but management has concerns about growth and new products

• • • Zoetis Inc. (ZTS:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, at a 26.3x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about growth and new products
    • Specifically, management may be downplaying concerns about their Companion Animal business, both in terms of growth and new products, and may be exaggerating their focus on providing alternatives to current treatments for dogs and cats in their Animal Health segment. Additionally, they may lack confidence in their ability to continue generating the majority of their revenues and profit from their core business going forward, and may be exaggerating their optimism regarding their U.S. Beef segment in 2018. Furthermore, they may have concerns about their in-line portfolio as a result of all the new products that have been launched during the year, and may be downplaying concerns about the impact of pork price cyclicality in China on their growth