In This Article:
One day after unveiling quarterly results that disappointed the market and engendered a stock sell-off, Zoetis (NYSE: ZTS) shares again tumbled. As of late-session trading on Friday, they were down by 4%, in no small part due to several analyst price target cuts. Meanwhile, the benchmark S&P 500 (SNPINDEX: ^GSPC) essentially traded sideways on the day.
Not-so-good guidance
Zoetis slightly topped analyst estimates for profitability and met those for revenue in its fourth quarter. But as investors know, stocks overwhelmingly trade more on future potential than historical performance. The problem was that the animal healthcare specialist's full-year 2025 revenue and earnings guidance came well short of the consensus pundit projection.
So it didn't come as a major shock on Friday when several of those analysts weighed in with new, more bearish takes on Zoetis.
Among the more influential companies wielding the scissors were white-shoe investment bank Morgan Stanley and Bank of America Securities. The former's Erin Wright reduced her price target by $5 per share to $230, and the latter's Michael Ryskin cut his to $200 from the previous $205. Both analysts maintained the equivalent of buy recommendations on the stock, however.
An outlier makes a cautious raise
Not every new analyst action on Zoetis Friday was a price target cut. Barclays, in the form of prognosticator Balaji Prasad, upped its fair value assessment slightly to $244 per share from the preceding $242. Prasad maintained an overweight (buy, in other words) recommendation.
The fairly minor cuts and increase show that Zoetis's fourth quarter was neither disastrous nor outstanding. I think the company runs a solid business, yet neither its recent growth rates nor its valuations are particularly compelling at the moment.
Should you invest $1,000 in Zoetis right now?
Before you buy stock in Zoetis, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Zoetis wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $829,128!*
Now, it’s worth noting Stock Advisor’s total average return is 948% — a market-crushing outperformance compared to 176% for the S&P 500. Don’t miss out on the latest top 10 list.
*Stock Advisor returns as of February 7, 2025