ZTS · Zoetis Inc.
The AI's read
Zoetis cut 2026 adjusted EPS to $6.15-$6.25 after a Q2 revenue miss and an 11% drop in companion-animal sales, citing weaker clinic visits, price-sensitive pet owners, and tougher competition. Management flagged competitive pricing in dermatology and parasiticides while U.S. livestock sales grew, showing the weakness is concentrated in companion care. The headline hit earnings guidance more than the EPS beat, so the move is at least partly new information the market must digest. The stock rallied ~3.9% today, which suggests buyers are focusing on the EPS beat and livestock strength despite the guidance cut. Bottom line: we lean bearish. Guidance compression plus durable companion-animal headwinds create downside risk, but the relief rally limits immediate panic; conviction 84%.