Core Insights - The article discusses the author's enjoyment of watching "Shark Tank" and highlights the experience of Scott Kaufman, who has over a decade of experience in the financial sector and serves as the lead analyst for Dividend Kings [1] Group 1 - Scott Kaufman, also known as Treading Softly, focuses on providing actionable insights into high-quality dividend-growing and undervalued investment opportunities [1] - The goal of the analysis is to achieve a robust total return through cash dividends and strong capital gains [1]

Summary of Key Points Core Viewpoint - Zoetis and Regeneron Pharmaceuticals have faced challenges over the past year, leading to disappointing financial results. However, recent developments indicate a potential recovery for both companies in the near future [1]. Group 1: Zoetis - Zoetis is a prominent player in the animal health sector, with a diverse product portfolio, particularly focused on companion animals [3]. - The company faced difficulties with its key growth products, Librela and Solensia, due to safety concerns that resulted in adverse events in pets [4]. - To counteract these issues, Zoetis has introduced new OA pain treatments, Lenivia and Portela, which have received approval in multiple countries and are expected to help regain market share [5]. - The new treatments are long-acting and require less frequent administration, which is advantageous for both veterinarians and pet owners [5]. - Established products like Apoquel continue to perform well, providing additional support for Zoetis' financial recovery [6]. Group 2: Regeneron - Regeneron has been dealing with intense competition for its leading product, Eylea, which treats various eye diseases [7]. - The company has made strides by launching a higher-dose version of Eylea and obtaining label expansions, allowing for a broader patient base and a more convenient dosing schedule [7]. - These advancements have positively influenced Regeneron's stock performance over the past six months [8]. - Regeneron continues to rely on its successful product Dupixent, which addresses conditions such as eczema and COPD, contributing to its growth [9].

Core Insights - Zoetis has experienced a significant decline in stock price, dropping nearly 40% after a decade of outperforming the S&P 500 with a 480% increase [1][6] - The company's current price-to-earnings (P/E) ratio is at a historic low of 21, down from an average of 39 since 2013, indicating a potential long-term buying opportunity [2] - Zoetis remains a leader in the animal healthcare industry, with a strong pipeline of new therapies and a commitment to annual major market approvals [3] Company Performance - The company has 12 new therapies with "blockbuster" potential, which could generate over $100 million in sales, and currently has 17 blockbuster drugs [4] - Zoetis targets chronic kidney failure, oncology, and cardiology for dogs and cats, representing a $5 billion market opportunity against annual sales of $9.3 billion [4] - The company has consistently outperformed the global animal healthcare market, which is expected to grow at 5% to 6% annually through 2035, with Zoetis achieving 8% annualized sales growth since 2013 [5] Investment Considerations - Despite the recent stock decline, Zoetis' operations remain robust, supported by a promising pipeline and a steadily growing dividend [6] - The company does not require double-digit sales growth to be an outperformer, but it may achieve closer to that figure than market expectations [5]

Core Viewpoint - Zoetis Inc. (ticker symbol ZTS) is currently rated as a Hold by both the Seeking Alpha Quant rating system and analysts, while Wall Street analysts have a Buy rating on the stock [2][3]. Company Overview - Zoetis has a market capitalization of $54.92 billion and operates within the healthcare sector, specifically in the pharmaceuticals industry [4]. Valuation Metrics - The company's valuation grade is a D-, with an Enterprise Value-to-EBITDA ratio of 14.65, compared to the sector average of 12.71. The PEG non-GAAP Forward ratio stands at 2.58, above the sector's 1.76, indicating potential overvaluation [4]. Growth Metrics - The growth grade is a D-, with year-over-year revenue growth at 2.68%, which is below the sector median of 6.38% and also below the company's five-year average of 8.06% [5]. Profitability Metrics - Zoetis has an A+ grade in profitability, with a net income margin of 28.21%, significantly higher than the sector average [5]. Momentum Metrics - The momentum grade is D+, with a one-year price performance decline of 25.07%, while the sector performance has been relatively flat [6]. Revisions Metrics - The revisions grade is D+, with three upward revisions and 12 downward revisions for earnings per share in the last three months, and one upward revision and 14 downward revisions for revenue in the same period [6]. Dividend Information - Zoetis pays a dividend yield of 1.70%, with a five-year growth rate of 20.11%. The safety grade for the dividend is A, and the consistency grade is B-, as the company has been paying dividends for 12 years [7].

Core Insights - The analysis focuses on high-quality companies that can outperform the market over the long term due to competitive advantages and high defensibility [1] Group 1: Company Analysis - Zoetis Inc. (ZTS) was previously covered in October 2021, but the stock was not deemed attractive due to extremely high valuation multiples [1] - The analysis emphasizes a focus on companies in Europe and North America, without constraints on market capitalization, ranging from large cap to small cap [1] Group 2: Analyst Background - The analyst has a Master's Degree in Sociology with a focus on organizational and economic sociology, and a Bachelor's Degree in Sociology and History [1]

Group 1 - The article provides a buy rating for Zoetis (ZTS) due to upcoming product launches and a relatively cheaper valuation compared to peers [1] - The investment approach emphasizes understanding core business economics, including competitive moat, unit economics, reinvestment opportunities, and management quality, which are crucial for long-term free cash flow generation and shareholder value [1] - The focus is on sectors with strong secular tailwinds, indicating a preference for industries that are expected to grow over time [1] Group 2 - The author has been a self-educated investor for 10 years and currently manages personal funds sourced from friends and family [1] - The motivation for writing is to share investment insights and receive feedback from fellow investors, aiming to help readers focus on long-term equity value drivers [1] - The analysis is intended to be both analytical and accessible, adding value to readers seeking high-quality, long-term investment opportunities [1]

Company Overview - Zoetis is focused on defining the next era in animal health through innovation, a science-to-scale model, and disciplined execution [2][3] - The company is led by CEO Kristin Peck and CFO Wetteny Joseph, who are presenting the company's vision and financial outlook [1][3] Industry Insights - The animal health industry is projected to grow to $90 billion over the next 10 years, driven by strong sectoral tailwinds in both companion animals and livestock [4]

Group 1 - The article does not contain relevant content regarding company or industry insights [1]

Summary of Zoetis Conference Call Company Overview - **Company**: Zoetis - **Industry**: Animal Health - **Current Market Size**: Approximately $50 billion, projected to grow to $90 billion over the next 10 years [4][3] Key Industry Insights - **Growth Drivers**: - Strong sectoral tailwinds in both companion animal and livestock segments [3] - Increasing global population demanding nutritious protein [4] - Shift towards pet medicalization driven by younger pet owners (Millennials and Gen Z) [6] - **Market Trends**: - Companion animal market growth driven by increased spending on veterinary care and advanced therapies [6] - Livestock sector recovering from disruptions caused by African swine fever and COVID-19, with mid-single-digit growth [8] Company Performance - **Revenue Growth**: - Zoetis has achieved an 8% compound annual growth rate (CAGR) since its IPO, outperforming the industry average of 5% [5] - **Profitability**: - EBITDA margins of 41%-42% and mid-20s return on invested capital (ROIC) [21] - **R&D Investment**: - $5 billion invested in R&D since IPO, leading to 2,000 regulatory approvals over the last decade [9][10] Product Pipeline and Innovation - **Future Blockbusters**: - 12 potential blockbuster drugs in the pipeline, with expectations for major market approvals annually [11][12] - **Key Areas of Focus**: - Chronic kidney disease, oncology, cardiology, obesity, and anxiety in pets, with significant market potential [13][14][15][16] - **Diagnostics and Preventatives**: - Emphasis on expanding diagnostics and preventative care in livestock and companion animals [20] Market Position and Strategy - **Commercial Excellence**: - Direct field force in 45 markets, combining sales with medical affairs and marketing for effective execution [15] - **Product Leadership**: - Simparica Trio leading in the parasiticide space, with high customer satisfaction [16] - **Dermatology Portfolio**: - Strong portfolio including Apoquel and Cytopoint, with plans for long-acting products [17][18] Financial Strategy - **Capital Allocation**: - Focus on innovation, disciplined capital allocation, and returning excess cash to shareholders through dividends and buybacks [24][25] - **Shareholder Returns**: - Over 125% of free cash flow returned to shareholders in the last three years, with a 13% CAGR in dividends [24] Challenges and Outlook - **Short-term Headwinds**: - Anticipated slowdown in companion animal growth due to price increases and macroeconomic factors [27][29] - **Long-term Confidence**: - Sustained growth expected from livestock and diagnostics, with a focus on executing commercial strategies [30][32] - **Future Growth Projections**: - Long-term growth expectations remain robust, supported by industry trends and Zoetis's innovation pipeline [35] Conclusion - **Zoetis's Position**: - Well-positioned to capitalize on the growing animal health market with a strong pipeline, innovative products, and a disciplined approach to capital allocation [26]

44TH ANNUAL J.P. MORGAN HEALTHCARE CONFERENCE Leading the Future of Animal Health January 12, 2026 Forward-Looking Statements This presentation contains forward-looking statements, which reflect the current views of Zoetis with respect to: industry growth and market outlook; business plans or prospects; future operating or financial performance; future guidance; future operating models; R&D costs; timing and likelihood of success; expectations regarding products, product approvals or products under developm ...