Zoetis (ZTS): Bull Thesis Remains But Near Term Volatility Is Likely - Stifel
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Stifel analyst, Jonathan Block, reiterated his Buy rating on shares of Zoetis Inc. (NYSE: ZTS) and expects upside to EPS over the next 12-24 months. The analyst's “bull scenario” is $3.00 in 2018 EPS (versus the currently modeled $2.71E) should be driven by capital allocation, upside in companion animal revenue, and better than expected opex control.
In the immediate term, however, U.S. livestock will likely continue to be volatile and face a difficult comparison as well as some challenges in 3Q16, which include the prices of cattle and milk, and the absence of a competitive response to BI’s viral vaccine.
In short, there are near-term challenges but some of these headwinds are likely to abate in 4Q16 and into FY17.
No change to the price target of $58.
Shares of Zoetis Inc. closed at $52.69 yesterday.
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