Valued at a market cap of $70.9 billion, Zoetis Inc. (ZTS) discovers, develops, manufactures, and commercializes animal health medicines, vaccines, diagnostic products and services, biodevices, genetic tests, and precision animal health solutions. The Parsippany, New Jersey-based company markets products for both livestock, such as cattle, swine, poultry, fish, and sheep, and companion animals, including dogs, cats, and horses.

Shares of this pets and livestock medicine producer have lagged behind the broader market over the past 52 weeks. Zoetis has fallen 5.3% over this time frame, while the broader S&P 500 Index ($SPX) has gained 8.6%. However, on a YTD basis, the stock is down 2.3%, outpacing SPX’s 3.8% drop. 

Narrowing the focus, ZTS has also underperformed the ProShares Pet Care ETF’s (PAWZ) 13.2% rise over the past 52 weeks and 2.9% uptick on a YTD basis. 

On May 6, shares of ZTS plunged 5.2%, despite delivering better-than-expected Q1 adjusted earnings of $1.48 per share and revenue of $2.2 billion. Compared to the year-ago quarter, its revenue grew 1.4%, driven primarily by stronger companion animal sales, though partially offset by weaker livestock revenue. Meanwhile, its adjusted EPS rose 7.2%, mainly due to higher revenue and lower cost of sales. 

Adding to the positives, the company raised its fiscal 2025 revenue and adjusted EPS guidance, reflecting the impact of foreign exchange and recently enacted tariffs. It now expects revenue to be between $9.4 billion and $9.6 billion, with organic operational revenue growth of 6% to 8%, and forecasts adjusted EPS in the range of $6.20 to $6.30. While the stock declined on the day of the announcement, it rebounded 4.1% in the following trading session.

For the current fiscal year, ending in December, analysts expect ZTS’ EPS to grow 5.6% year over year to $6.25. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters. 

Among the 16 analysts covering the stock, the consensus rating is a “Strong Buy” which is based on 14 “Strong Buy,” one “Moderate Buy,” and one “Hold” rating. 

The configuration has remained consistent over the past three months. 

On May 7, UBS Group AG (UBS) analyst Andrea Alfonso maintained a “Neutral” rating on ZTS and lowered its price target to $170, which indicates a 6.7% potential upside from the current levels. 

The mean price target of $201.53 represents a 26.5% premium from Zoetis’ current price levels, while the Street-high price target of $244 suggests an ambitious upside potential of 53.2%.