$ZTS stock call: Buy, accumulate $69 to $76
$ZTS: I'm a buyer here and I'd add down to $69.
22% below the 200-day
12x this year's EPS guide
7.5% free cash flow yield plus a 2.8% dividend
I think the pet slump is priced in because the $69 to $72 base has held for 5 months.
Not financial advice
Bear case: US companion animal sales fell 11% in Q2 on fewer vet visits, price-sensitive owners and new rivals in derm and flea/tick. Generics hit Cerenia and Convenia. Guidance was cut twice and now sees 2026 organic revenue down 1% to 3%. If that slips further the multiple stays low.
Chart + wave read: I count five waves down from the $177.40 Feb 2025 top. Wave 3 ended with the May earnings gap to $72.38, wave 4 bounced to $82.98 and wave 5 ground out marginal new lows into $68.77 on Oct 2. Price is back above the 50-day. A close below $68.77 breaks my count.
The business: Zoetis leads animal health with a 71% gross margin and 37% operating margin. US livestock sales rose 23% in Q2. In the last 12 months it made $2.4B of free cash flow and bought back $3.6B of stock. It says 12+ potential blockbusters are in the pipeline.
My plan: start here and add toward $69. The first target is the 200-day and 23.6% retrace near $94 to $96, then $110 (38.2%). Q3 results come Nov 5 so I'm keeping some cash for that print. If the pet market stabilizes this is too cheap for a business this profitable.
Sources: FMP: $ZTS quote, 50/200-day, price history, ratios, cash flow, buybacks and dividends (Oct 14, 2026) · Zoetis Q2 2026 results: US companion animal -11%, US livestock +23%, generics on Cerenia/Convenia, cut 2026 guidance · Animal Health News: Zoetis cuts 2026 outlook as US companion animal sales fall 11%, 12+ blockbuster candidates · StockTitan 8-K summary: guidance cut to $6.15 to $6.25 adj. EPS from $6.85 to $7.00 · TIKR: Zoetis drops 21% after Q1 and cuts guidance (May 7, 2026) · Investing.com: Q1 2026 call transcript, generics on Cerenia/Convenia, pipeline timing
Not financial advice. For informational and educational purposes only.
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