Zoetis (ZTS) Up 1% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Zoetis (ZTS). Shares have added about 1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Zoetis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Zoetis Q3 Earnings & Revenues Beat, ’24 Outlook RaisedZoetisdelivered third-quarter 2024 adjusted earnings (excluding one-time items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.46. In the year-ago quarter, the company delivered adjusted earnings of $1.36 per share.Total revenues grew 11% year over year to $2.39 billion in the reported quarter, which beat the Zacks Consensus Estimate of $2.29 billion. In the year-ago quarter, the company reported total revenues of $2.15 billion.Zoetis’ Q3 Results in DetailZoetis derives the majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company reports business results under two geographical operating segments — the United States and International.Revenues from the U.S. segment increased 15% year over year to $1.35 billion in the reported quarter, beating both the Zacks Consensus Estimate as well as our model estimate of $1.27 billion and $1.24 billion, respectively.Sales of companion animal products in the U.S. region jumped 18% from the prior-year quarter’s level to $1.07 billion, driven by Zoetis’ monoclonal antibody products for osteoarthritis (OA) pain, Librela for dogs and Solensiafor cats, as well as its flea, tick and heartworm combination product for dogs, Simparica Trio. The uptick was also fueled by the company’s key dermatology portfolio, including Apoqueland Cytopoint.Sales of livestock products in the United States increased 5% in the third quarter to $278 million, mainly driven by higher sales ofcattle and swine products due to improved supply of ceftiofur compared with the year-ago quarter.Revenues in the International segment improved 7% year over year on a reported basis and 13% on an operational basis to $1.021 billion, beating the Zacks Consensus Estimate of $996.4 million as well as our model estimate of $1.016 billion.Sales of companion animal products rose 7% on a reported basis and 11% on an operational basis to $541 million, driven by growth in several key products. These included OA pain products, Librela for dogs and Solensia for cats, dermatology products like Apoquel and Cytopoint, as well as Zoetis’ parasiticide products, such as Simparica and the Simparica Trio.On a year-over-year basis, livestock product sales increased 7% on a reported basis and 15% operationally to $480 million. Growth in both the cattle and poultry portfolios was driven largely by price increases across the broader international segment, as well as the timing of certain customer purchases. Additionally, sales of fish products grew due to increased demand for vaccines in Norway.Zoetis Raises 2024 GuidanceZoetis now expects adjusted diluted earnings in the range of $5.86-$5.92 per share in 2024 compared with the previous guidance of $5.78-$5.88.Revenues are now expected between $9.2 billion and $9.3 billion, indicating operational growth of 10-11%. Total revenues were previously anticipated between $9.10 billion and $9.25 billion.This can also be a reason for the upward movement of the stock price.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.VGM ScoresCurrently, Zoetis has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zoetis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerZoetis is part of the Zacks Medical - Drugs industry. Over the past month, Corcept Therapeutics (CORT), a stock from the same industry, has gained 14.4%. The company reported its results for the quarter ended September 2024 more than a month ago.Corcept reported revenues of $182.55 million in the last reported quarter, representing a year-over-year change of +47.7%. EPS of $0.41 for the same period compares with $0.28 a year ago.For the current quarter, Corcept is expected to post earnings of $0.37 per share, indicating a change of +32.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.4% over the last 30 days.Corcept has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zoetis Inc. (ZTS): Free Stock Analysis Report Corcept Therapeutics Incorporated (CORT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks