Despite reducing Zoetis Inc. (NYSE: ZTS) price target by 9%, Piper Jaffray analyst, Kevin Ellich kept his Outperform rating and sees a near term catalyst as Simparica prepares for launch and Apoquel finds a second API source.

ZTS reported solid Q4 results highlighted by 6% operational growth which included 30% operational growth in U.S. companion animal product sales. Revenue beat Street estimates even with slightly lower than expected Apoquel sales, which came in at ~$110M for the year versus prior expectations for $125M due to supply issues. The upcoming approval of Simparica in the U.S. by the end of Q1 will be a positive catalyst and should give the company enough time to capitalize on this year's flea & tick season as management indicated it is ready for launch immediately pending FDA approval.

The analyst is optimistic that ZTS' oral flea & tick medication known as Simparica will be approved in the U.S. before the Western Vet conference in early March.

Organic growth trends remain strong despite harsher FX environment. While ZTS lowered FY16 and FY17 revenue guidance by $100M and $75M, respectively, due to foreign exchange, organic operational growth in 2016 is expected to be 6-8% excluding 2% contribution from PHARMAQ and other minor acquisitions. 2016 should be viewed as more of a transitional year as the SKU reduction and operational efficiency initiative will negatively impact revenue growth by ~6%.

PT is reduced to $53 (from $58) on greater FX impact in the DCF and consistent assumptions for terminal growth and WACC.

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Shares of Zoetis Inc. closed at $40.43 yesterday.