Zoetis Rated Strong Sell Ahead of Earnings Miss

Zoetis (ZTS) shares fell 2.22 percent to $71.40, underperforming the S&P 500's 0.17 percent gain and the Nasdaq's 0.4 percent rise.

Analysts are bracing for a significant earnings miss. Third-quarter EPS is projected at $1.52, down 10.59 percent year-over-year. Revenue is forecast at $2.31 billion, a 3.66 percent decline. For the full year, consensus estimates call for EPS of $6.20, down 3.28 percent, with revenue at $9.24 billion, down 2.45 percent.

Zoetis carries a Zacks Rank of #5 (Strong Sell). The stock trades at a forward P/E of 11.77—a 27 percent discount to the Medical-Drugs industry average of 16.09. Its PEG ratio of 1.7 sits slightly below the sector average of 1.78, suggesting limited upside relative to growth headwinds.

The Medical-Drugs industry ranks 159th among 250+ sectors tracked by Zacks, placing it in the bottom 36 percent. Top-half industries historically outperform bottom-half peers by a 2-to-1 margin.

Zoetis (ZTS) shares fell 2.22 percent to $71.40, underperforming the S&P 500's 0.17 percent gain and the Nasdaq's 0.4 percent rise.

The Medical-Drugs industry ranks 159th among 250+ sectors tracked by Zacks, placing it in the bottom 36 percent. Top-half industries historically outperform bottom-half peers by a 2-to-1 margin.