Financial Performance - The company reported revenue of $2.3 billion for Q4 2024, a 5% increase compared to Q4 2023, with operational revenue growth of 6%[3] - Net income for Q4 2024 was $581 million, or $1.29 per diluted share, reflecting an 11% and 13% increase, respectively, on a reported basis[3] - For the full year 2024, revenue reached $9.3 billion, an 8% increase compared to 2023, with operational revenue growth of 11%[4] - Adjusted net income for full year 2024 was $2.7 billion, or $5.92 per diluted share, marking a 10% and 11% increase, respectively, on a reported basis[5] - Revenue for Q4 2024 was $2,317 million, a 5% increase from $2,213 million in Q4 2023[21] - Net income attributable to Zoetis for Q4 2024 was $581 million, up 11% from $525 million in Q4 2023[21] - Earnings per share (diluted) for Q4 2024 increased to $1.29, representing a 13% rise compared to $1.14 in Q4 2023[21] - Total revenue for the twelve months ended December 31, 2024, reached $9,256 million, an 8% increase from $8,544 million in 2023[21] - Net income attributable to Zoetis for the twelve months ended December 31, 2024, was $2,486 million, a 6% increase from $2,344 million in 2023[28] - Adjusted net income for the twelve months ended December 31, 2024, was $2,693 million, a 10% increase from $2,457 million in 2023[40] - Total earnings for the company were $3,133 million, a 7% increase from $2,936 million in 2023[63] Revenue Breakdown - Revenue in the U.S. segment for Q4 2024 was $1.3 billion, a 4% increase, while international segment revenue was $1.0 billion, reflecting a 6% increase on a reported basis[8] - Companion animal products in the U.S. saw a 7% increase, driven by products like Simparica Trio and the dermatology portfolio[8] - The company achieved 11% revenue growth in the U.S. and 10% operational revenue growth internationally for full year 2024[7] - Companion Animal revenue grew by 13% to $6,278 million, up from $5,576 million in 2023[51] - Livestock revenue remained stable at $2,898 million, showing no significant change from $2,890 million in 2023[51] - U.S. total revenue increased by 11% to $5,074 million, compared to $4,555 million in 2023[51] - International revenue for 2024 was $4,102 million, a 5% increase from $3,911 million in 2023[54] - U.S. revenue increased to $5,074 million in 2024, up 11% from $4,555 million in 2023[63] - International revenue rose to $4,102 million, reflecting a 5% increase from $3,911 million in the previous year[63] - Total reportable segments revenue reached $5,454 million, an 11% increase compared to $4,900 million in 2023[63] Guidance and Projections - The company expects full year 2025 revenue guidance of $9.225 to $9.375 billion, with diluted EPS of $5.70 to $5.80 on a reported basis[10] - The company is confident in sustaining above-market growth, guiding for 6% to 8% organic operational growth in revenue for 2025[7] - The company expects full-year 2025 revenue to be between $9,225 million and $9,375 million, with organic operational growth projected at 6% to 8%[43] - Adjusted diluted EPS for 2025 is forecasted to be between $6.00 and $6.10, reflecting a significant increase from previous periods[43] - The effective tax rate on adjusted income for 2025 is expected to be approximately 21%[43] Expenses and Costs - Research and development expenses for Q4 2024 were $186 million, a 7% increase from $174 million in Q4 2023[21] - Selling, general and administrative expenses for Q4 2024 rose to $625 million, an 11% increase from $565 million in Q4 2023[21] - Adjusted cost of sales for the twelve months ended December 31, 2024, was $2,714 million, representing a 7% increase from $2,548 million in 2023[40] - Adjusted SG&A expenses for the twelve months ended December 31, 2024, were $2,301 million, an 8% increase from $2,130 million in 2023[40] - Corporate costs increased by 16% to $1,213 million, up from $1,042 million in the previous year[65] Profitability Metrics - The company reported a gross profit of $1,610 million for Q4 2024, slightly up from $1,485 million in Q4 2023[24] - Gross profit in the U.S. segment rose by 8% to $1,028 million, with a gross margin of 81.8%[56] - International earnings increased by 6% to $523 million, with a gross margin of 67.7%[56] - The company reported a total earnings increase of 13% to $732 million for the period[56] - Gross profit margin in the U.S. improved to 81.6%, up from 80.2% in 2023[63] - The company reported a gross profit of $4,138 million in the U.S., which is a 13% increase from $3,655 million in 2023[63] Other Financial Information - Interest expense decreased by 14% to $51 million in Q4 2024 from $59 million in Q4 2023[21] - The provision for taxes on income for Q4 2024 was $151 million, a 19% increase from $127 million in Q4 2023[21] - Total acquisition and divestiture-related costs for the twelve months ended December 31, 2024, were $14 million net of tax, compared to $7 million in 2023[31] - The company reported a net loss of $3 million on the sale of businesses for the three months ended December 31, 2024[36] - Adjusted R&D expenses for the three months ended December 31, 2024, were $186 million, a 7% increase from $174 million in the same period of 2023[39]

Zoetis (ZTS) ended the recent trading session at $172.24, demonstrating a +0.17% swing from the preceding day's closing price. This change lagged the S&P 500's 0.72% gain on the day. Elsewhere, the Dow gained 0.3%, while the tech-heavy Nasdaq added 1.35%.Heading into today, shares of the animal health company had gained 3.64% over the past month, lagging the Medical sector's gain of 4.51% and outpacing the S&P 500's gain of 1.02% in that time.Investors will be eagerly watching for the performance of Zoetis ...

Company Performance - Zoetis (ZTS) closed at $165.02, reflecting a +0.94% change from the previous day, outperforming the S&P 500's gain of 0.16% [1] - Over the past month, Zoetis shares have declined by 7.48%, underperforming the Medical sector's loss of 5.77% and the S&P 500's loss of 2.8% [1] Upcoming Financial Results - Zoetis is set to announce its earnings on February 13, 2025, with an expected EPS of $1.38, indicating an 11.29% growth year-over-year [2] - Revenue is anticipated to reach $2.32 billion, reflecting a 4.98% increase compared to the same quarter last year [2] Analyst Forecasts - Recent revisions to analyst forecasts for Zoetis are important as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [3] Zacks Rank and Stock Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows that 1 ranked stocks have yielded an average annual return of +25% since 1988 [5] - Currently, Zoetis holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate having decreased by 0.08% over the last 30 days [5] Valuation Metrics - Zoetis has a Forward P/E ratio of 25.63, which is a premium compared to the industry's average Forward P/E of 18.63 [6] - The company has a PEG ratio of 2.51, while the average PEG ratio for the Medical - Drugs industry is 1.81 [6] Industry Overview - The Medical - Drugs industry, part of the Medical sector, has a Zacks Industry Rank of 73, placing it in the top 30% of all industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - Zoetis has been named "Stock to Study" by BetterInvesting Magazine for its March 2025 issue, indicating potential interest from investors regarding its valuation [1] - The fundamental data for Zoetis, including sales, earnings, pre-tax profit, and return on equity, is accessible through the National Association of Investors [2] - A full report on Zoetis will be published in the March 2025 issue of BetterInvesting Magazine, providing detailed insights for investors [2] Group 2 - The same issue of BetterInvesting Magazine will also feature a fundamental review of LKQ Corp., which is considered undervalued and worthy of further study [3] - The Editorial Advisory and Securities Review Committee consists of several CFA members who evaluate companies for potential investment opportunities [3]

Core Insights - The article discusses various stock rating systems, including the Zacks Rank and Style Scores, which help investors identify stocks with the potential for high returns based on value, growth, and momentum characteristics [1][5][15]. Stock Rating System - Stocks are assigned ratings from A to F, with A being the best, indicating a higher chance of outperforming the market [1]. - The Zacks Rank utilizes earnings estimate revisions to assist investors in creating successful portfolios [5]. Style Scores - The Value Style Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [16]. - The Growth Style Score evaluates a company's financial strength and future outlook, emphasizing projected earnings and cash flow [2]. - The Momentum Style Score capitalizes on price trends, using metrics like weekly price changes to identify favorable investment opportunities [3]. - The VGM Score combines all Style Scores, providing a comprehensive indicator for stock selection [4]. Investment Recommendations - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for the highest probability of success [7]. - A stock rated 3 (Hold) should also have Style Scores of A or B to maximize upside potential [7]. - Stocks rated 4 (Sell) or 5 (Strong Sell) are less favorable, even if they have high Style Scores, due to declining earnings forecasts [8]. Company Spotlight: Zoetis Inc. - Zoetis Inc. is a leader in the animal health sector, focusing on various product categories for livestock and companion animals [10]. - The company has a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating potential for growth [11]. - Zoetis is forecasted to achieve year-over-year earnings growth of 11.1% for the current fiscal year, with recent earnings estimates revised upward [11][12].

Group 1 - Best Anchor Stocks focuses on identifying high-quality stocks that can outperform the market while maintaining a low volatility/growth ratio [1] - The portfolio has shown significant revenue growth and has outperformed both the S&P 500 and Nasdaq since its inception in January 2022 [1] - An article from the Wall Street Journal in April raised concerns about the side effects of Librela, a pain medication for osteoarthritis in dogs produced by Zoetis Inc. [1] Group 2 - Librela is categorized as a monoclonal antibody (MAB) used for treating osteoarthritis pain in dogs [1] - The article claimed that Librela has had dangerous side effects, which could impact Zoetis Inc.'s reputation and sales [1]

Company Overview - Zoetis shares have decreased by 7.46% over the past month, underperforming the Medical sector's loss of 2.76% and the S&P 500's loss of 0.71% [1] - The company closed the most recent trading day at $164.84, with a daily increase of 0.81%, lagging behind the S&P 500's daily gain of 1.09% [5] Analyst Estimates - Recent changes to analyst estimates for Zoetis indicate optimism regarding the company's business and profitability, with a 0.08% increase in the Zacks Consensus EPS estimate over the last 30 days [2][7] - For the full year, earnings are projected at $5.91 per share and revenue at $9.26 billion, reflecting increases of +11.09% and +8.41% respectively from the previous year [6] Valuation Metrics - Zoetis is currently trading at a Forward P/E ratio of 27.69, which is a premium compared to the industry's average Forward P/E of 15.46 [3] - The company has a PEG ratio of 2.72, while the Medical - Drugs industry average PEG ratio is 1.72 [11] Industry Context - The Medical - Drugs industry, which includes Zoetis, holds a Zacks Industry Rank of 75, placing it in the top 30% of over 250 industries [8] - The Zacks Rank system indicates that stocks rated 1 (Strong Buy) have historically produced an average annual return of +25% since 1988 [7] Upcoming Performance Expectations - Analysts expect Zoetis to report earnings of $1.38 per share in the upcoming earnings disclosure, representing year-over-year growth of 11.29%, with a revenue estimate of $2.32 billion, up 4.98% from the prior-year quarter [9]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence [1][2] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market within a 30-day timeframe [3] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] - Value Score emphasizes identifying undervalued stocks using financial ratios [4] - Growth Score focuses on a company's future earnings and financial health [5] - Momentum Score capitalizes on price trends and earnings outlook changes [6] - VGM Score combines all three styles to highlight stocks with the best overall potential [7] Zacks Rank and Performance - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors [8] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] - There are typically over 800 top-rated stocks available, making selection challenging for investors [10] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [11] - The direction of earnings estimate revisions is crucial in stock selection, as downward trends can indicate potential price declines [12][13] Company Spotlight: Zoetis Inc. - Zoetis Inc., established from Pfizer's animal health business spin-off, specializes in products for livestock and companion animals [14] - Currently rated 3 (Hold) with a VGM Score of B, Zoetis shows promise for growth investors with a projected earnings growth of 10.9% for the current fiscal year [15] - The company has seen upward revisions in earnings estimates, with the Zacks Consensus Estimate increasing to $5.90 per share [15] - With a solid Zacks Rank and favorable Style Scores, Zoetis is recommended for investors' consideration [16]

Core Insights - Zoetis reported Q3 2024 adjusted earnings of $1.58 per share, exceeding the Zacks Consensus Estimate of $1.46, and up from $1.36 in the same quarter last year [2] - Total revenues for the quarter reached $2.39 billion, an 11% increase year-over-year, surpassing the Zacks Consensus Estimate of $2.29 billion [2] Financial Performance - U.S. segment revenues increased 15% year-over-year to $1.35 billion, beating both the Zacks Consensus Estimate and internal estimates [4] - Companion animal product sales in the U.S. rose 18% to $1.07 billion, driven by monoclonal antibody products and key dermatology offerings [5] - Livestock product sales in the U.S. grew 5% to $278 million, primarily due to improved supply of ceftiofur [6] - International segment revenues improved 7% year-over-year to $1.021 billion, exceeding estimates [6] Product Performance - International companion animal product sales rose 7% to $541 million, supported by growth in OA pain products and dermatology products [7] - Livestock product sales internationally increased 7% to $480 million, driven by price increases and customer purchasing timing [8] Future Outlook - Zoetis raised its 2024 guidance for adjusted diluted earnings to a range of $5.86-$5.92 per share, up from the previous range of $5.78-$5.88 [9] - Expected revenues for 2024 are now between $9.2 billion and $9.3 billion, indicating operational growth of 10-11% [9] Market Position - Zoetis holds a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [12] - The company has a VGM Score of B, reflecting a balanced growth and momentum outlook [11]

Summary of Zoetis Inc. Conference Call Company Overview - **Company**: Zoetis Inc. (NYSE: ZTS) - **Industry**: Animal Health Key Points and Arguments Market Position and Growth - Zoetis is positioned to sustain above-market growth due to strong secular trends in the animal health industry, particularly in the companion animal segment, which constitutes two-thirds of the company's business [4][3] - The company has a broad portfolio that allows it to capitalize on market expansion, especially in dermatology and parasiticides, where it is a first mover [5][3] Pricing and Volume Dynamics - The company has successfully implemented price increases across its business while maintaining robust volume growth, with volume growth outpacing price growth in both dermatology and Trio products [7][8] - Historical price levels are expected to sustain long-term growth at a rate of 2% to 3%, with current levels slightly higher than this range [8][22] Product Launches and Market Dynamics - Librela, launched in October 2023, is expected to contribute significantly to growth, despite experiencing some destocking dynamics in Q1 2025 [9][10] - The company anticipates strong year-over-year growth for Librela, with a market size of approximately $27 billion and a significant opportunity to treat osteoarthritis pain in dogs [27][26] Competitive Landscape - Zoetis is confident in its ability to defend its market position against new entrants using price strategies, citing the strong demand for its differentiated products [18][12] - The company has seen a shift in its product mix from production animals to companion animals, reflecting changing consumer preferences and increased spending on pet health [36][37] Innovation and Pipeline - The company is focused on expanding its pipeline in areas such as oncology, chronic kidney disease, and cardiovascular health, while also continuing to innovate within existing franchises [42][43] - Life cycle innovations are expected to drive incremental growth across existing franchises, with a strong emphasis on R&D investments [44][45] Financial Strategy - Zoetis prioritizes internal investments to drive organic growth over share buybacks and dividends, although it maintains a consistent dividend growth rate of approximately 20% CAGR over the last decade [46][47] - The company is generating significant cash flows, allowing it to invest in the business while also considering share buybacks when intrinsic value is favorable [47][46] Consumer Behavior and Market Trends - Increased consumer spending on veterinary care, with veterinary CPI rising over 40% since pre-pandemic levels, indicates strong demand for premium products [19][20] - The company has observed a 4% increase in clinic visits for dermatology, suggesting strong consumer engagement and willingness to pay for pet health services [21][20] Conclusion - Zoetis is well-positioned for continued growth in the animal health market, leveraging its strong product portfolio, innovative pipeline, and favorable market dynamics to capitalize on the increasing importance of pet health among consumers [3][4][5]