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Investing.com - UBS has reiterated its Neutral rating and $170.00 price target on Zoetis Inc . (NYSE:ZTS), a company maintaining a robust 71% gross profit margin, following FDA approval of Merck (NSE:PROR)’s Bravecto Quantum injectable flea and tick treatment. According to InvestingPro data, analyst targets range from $160 to $238, suggesting potential upside from current levels.
The new Bravecto Quantum represents the latest addition to Merck’s BRAVECTO franchise, which previously offered chewable tablets and topical solutions for parasite control in pets.
UBS notes that while injectable treatments like Bravecto Quantum offer convenience and improved compliance, their higher cost may limit adoption among pet owners.
The firm points out that clinical studies for Bravecto Quantum show no label limitations for concurrent use with other parasiticides, potentially allowing veterinarians to administer it alongside Zoetis’ ProHeart12 heartworm prevention treatment in a once-annual injectable regimen.
UBS maintains its $170 price target based on shares trading at 17x its NTM + 12Me EBITDA forecast, suggesting multiples will remain constrained until there is greater confidence in Zoetis delivering high-single-digit revenue growth with its current product lineup.
In other recent news, Zoetis Inc. reported a strong first-quarter performance, with a 9% year-over-year operational organic revenue growth and an 8% increase in adjusted earnings per share. This positive outcome led BTIG to maintain a Buy rating with a $200 price target, citing the company’s potential for further global market penetration. However, UBS adjusted its price target for Zoetis to $170 from $189, maintaining a Neutral rating due to weaker-than-expected sales trends in the U.S. Librela pain franchise and global dermatology products. Despite these challenges, UBS does not view the recent performance as a fundamental change to Zoetis’ overall outlook. Leerink Partners also revised its price target to $180 from $190, maintaining an Outperform rating, while acknowledging a mixed quarter with strong consumer spending on parasiticides and dermatology products. Piper Sandler reiterated an Overweight rating with a $210 price target, suggesting that new competition is unlikely to impact Zoetis’ 2025 guidance negatively. Additionally, Zoetis appointed Dr. Mark Stetter, Dean of the University of California, Davis School of Veterinary Medicine, to its Board of Directors, enhancing its expertise in veterinary medicine.
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