Zoetis (ZTS) Falls More Steeply Than Broader Market: What Investors Need to Know

Zoetis (ZTS) closed the most recent trading day at $113.35, moving -2.81% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 1.67%. Meanwhile, the Dow lost 1.73%, and the Nasdaq, a tech-heavy index, lost 2.15%.

Coming into today, shares of the animal health company had lost 10.12% in the past month. In that same time, the Medical sector lost 7.36%, while the S&P 500 lost 6.15%.

The upcoming earnings release of Zoetis will be of great interest to investors. The company's upcoming EPS is projected at $1.61, signifying a 8.78% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $2.32 billion, indicating a 4.58% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $6.99 per share and revenue of $9.91 billion. These totals would mark changes of +9.05% and +4.66%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Zoetis. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.06% rise in the Zacks Consensus EPS estimate. Zoetis is currently sporting a Zacks Rank of #2 (Buy).

Looking at valuation, Zoetis is presently trading at a Forward P/E ratio of 16.69. Its industry sports an average Forward P/E of 17.97, so one might conclude that Zoetis is trading at a discount comparatively.

We can additionally observe that ZTS currently boasts a PEG ratio of 1.79. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Medical - Drugs was holding an average PEG ratio of 1.24 at yesterday's closing price.

The Medical - Drugs industry is part of the Medical sector. This group has a Zacks Industry Rank of 99, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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