Zoetis (ZTS) Success Could Trigger Animal Healthcare Spin-Off Bonanza
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Price: $73.79 -2.7%
Rating Summary:
18 Buy, 15 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
18 Buy, 15 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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This morning a number of analysts initiated coverage on animal healthcare company Zoetis (NYSE: ZTS). Zeotis specializes in veterinary vaccines and medicines and was previously owned by Pfizer (NYSE: PFE).
Overall, coverage was positive, with strong endorsements for Deutsche Bank, JPMorgan, and a number of other firms offering a favorable view on the stock, as they see strong future growth in this area. Positives include low R&D costs and manageable regulation and quick approval times.
Other analysts, including analysts at Goldman Sachs, struggled with valuation and rated the stock Neutral. Interestingly, analysts at Goldman think the success of Zeotis will inspire additional animal healthcare spin-offs.
"PFE's outperformance (+61% since 1/1/2011 vs. DRG +31%) should certainly draw the attention of pharma peers with their own animal health (AH) businesses. Specifically, we are interested in Merck & Co. Inc. (NYSE: MRK) and Eli Lilly (NYSE: LLY) AH business units and what could happen should those 2 companies consider alternative capital allocation strategies similar to what PFE has done," said analyst Jami Rubin.
"If MRK and LLY AH units were valued by the market similarly to ZTS, we could see 5% to 6% of embedded value being unlocked."
Goldman Sachs initiated coverage on Zoetis Inc. with a Neutral rating and a price target of $33.00.
For an analyst ratings summary and ratings history on Zoetis Inc. (NYSE: ZTS) click here. For more ratings news on Zoetis Inc. click here.
Shares of Zoetis Inc. closed at $33.82 yesterday.
Overall, coverage was positive, with strong endorsements for Deutsche Bank, JPMorgan, and a number of other firms offering a favorable view on the stock, as they see strong future growth in this area. Positives include low R&D costs and manageable regulation and quick approval times.
Other analysts, including analysts at Goldman Sachs, struggled with valuation and rated the stock Neutral. Interestingly, analysts at Goldman think the success of Zeotis will inspire additional animal healthcare spin-offs.
"PFE's outperformance (+61% since 1/1/2011 vs. DRG +31%) should certainly draw the attention of pharma peers with their own animal health (AH) businesses. Specifically, we are interested in Merck & Co. Inc. (NYSE: MRK) and Eli Lilly (NYSE: LLY) AH business units and what could happen should those 2 companies consider alternative capital allocation strategies similar to what PFE has done," said analyst Jami Rubin.
"If MRK and LLY AH units were valued by the market similarly to ZTS, we could see 5% to 6% of embedded value being unlocked."
Goldman Sachs initiated coverage on Zoetis Inc. with a Neutral rating and a price target of $33.00.
For an analyst ratings summary and ratings history on Zoetis Inc. (NYSE: ZTS) click here. For more ratings news on Zoetis Inc. click here.
Shares of Zoetis Inc. closed at $33.82 yesterday.
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