In the latest trading session, Zoetis (ZTS) closed at $79.57, marking a -2.25% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.5%. Elsewhere, the Dow saw an upswing of 0.7%, while the tech-heavy Nasdaq appreciated by 0.31%.
The animal health company's shares have seen an increase of 7.84% over the last month, surpassing the Medical sector's gain of 5.49% and the S&P 500's loss of 0.23%.
Analysts and investors alike will be keeping a close eye on the performance of Zoetis in its upcoming earnings disclosure. The company is expected to report EPS of $1.85, up 5.11% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $2.49 billion, showing a 1.39% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $6.91 per share and a revenue of $9.75 billion, indicating changes of +7.8% and +2.96%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Zoetis. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.04% increase. Right now, Zoetis possesses a Zacks Rank of #4 (Sell).
From a valuation perspective, Zoetis is currently exchanging hands at a Forward P/E ratio of 11.78. This denotes a discount relative to the industry average Forward P/E of 16.32.
One should further note that ZTS currently holds a PEG ratio of 1.26. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Medical - Drugs industry held an average PEG ratio of 1.55.
The Medical - Drugs industry is part of the Medical sector. This group has a Zacks Industry Rank of 144, putting it in the bottom 41% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Zoetis Inc. (ZTS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).