Boston, MA 07/05/2013 (wallstreetpr) – Zoetis, Inc. (NYSE:ZTS), the world’s largest company in animal medicines and vaccines, continues to search for the bottom and fail. Every time the investors hope for a sustained rally, their hopes get dashed as the stock goes down inevitably, though in a zigzag way. Right now it is trading at 29.70, below where it started trading on 1st February this year. The stock is about 15% down from its recent 52-week high.
After 60 years of operation, Pfizer Inc. (NYSE:PFE) spun-off Zoetis earlier this year and gave up its entire stake. Pfizer exchanged 0.9898 shares of Zoetis’ common stock for each of its own. Pfizer gave up 400,985,000 common stocks of Zoetis in exchange of 405,117,195 of its own common stock. The exchange offer was highly over–subscribed, showing the belief of the investors in the future growth of Zoetis.
Many analysts consider this stock, the latest entrant in the S&P 500 index, expensive, trading at a trailing price to earnings ratio of 33 and 16.5 times its trailing EBITDA. However, the market seems ready to reflect a premium for the growth potential supported by the increase in both the top and bottom lines in the first quarter of 2013. Revenue for the first quarter reached $1.1 billion, growing by 4%. Net income saw a growth of 26% and the EPS increased by 27%. The company holds a 19% stake in the $22 billion animal health market and announced approximately $4.2 billion in revenue for the year 2011. Revenue is expected to increase from $4.43 billion to $4.53 billion for the full year of 2013. The company also expects to improve its 27% share of revenue that comes from Asia and maintain the 40% revenue share in the USA at stable levels.
Now that Zoetis is independent and fully free from Pfizer after the completion of the exchange, investors would like to see their hopes getting realized.
