What are the medicines and prospects of Zoetis, a manufacturer of animal products?

Over the past 12 months, the manufacturer of veterinary products Zoetis Inc. (ZTS) has risen in price by almost 30%, even considering a significant drop in early 2022 due to the stock exchange’s general situation. Nevertheless, Zoetis’ business remains robust, and the company is rapidly increasing sales. 

Can she repeat last year’s success? Zoetis specializes in the production of pharmaceuticals for pets and livestock production. The past quarters have been successful for Zoetis due to the high demand for products in the pet segment. One of the growth drivers was the new product Simparica Trio – a remedy for parasites. 

It is an innovative drug that protects pets from several of the most common parasites at once, including ticks. In 2021, the company also began selling Librela and Solensia drugs to treat osteoarthritis in dogs and cats. They on monoclonal antibodies for adequate anesthesia and joint mobility with minimal damage to the kidneys and liver. 

This drug is innovative for the veterinary industry, and it is difficult for competitors to repeat it. Zoetis recently published a forecast for 2021, announced a $3.5 billion share buyback, and announced a 30% increase in dividends to $0.325 per quarter. To a yield of 0.6% at the current stock price. Thus, Zoetis has an opportunity to return to growth. The company offers a large selection of innovative drugs, and their sales may grow as the number of households with pets in the United States increases. 

However, macroeconomic factors may harm sales, for example, inflation, which may force you to buy cheaper veterinary drugs rather than innovative solutions from Zoetis. In addition, there is still no confidence in the full recovery of the second important segment of the company – drugs for livestock farms. Losses in this sector began in 2020, and the pandemic is still affecting this business. Again, more details will be in the Zoetis report, presented mid-February.