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Zoetis (ZTS) to Report Q4 Earnings: What's in the Cards?

Zoetis Inc. ZTS is gearing up to report fourth-quarter 2018 results.

Zoetis’ performance has been impressive, with the company surpassing expectations in all of the previous four quarters, the average positive earnings surprise being 6.98%.

Zoetis’ share price movement shows that the stock has outperformed the industry in the past year. The stock has rallied 19.4%, against the industry’s decline of 16.4%.

 

Let's see how things are shaping up for this announcement.

Factors to Consider

Zoetis derives majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company continues to strengthen its diverse product portfolio through lifecycle innovations, strong customer relationships, and access to new markets and technologies.

The company’s companion animal business has been performing well. Apoquel and other product launches continue to drive growth in companion animal portfolio. Key dermatology products Apoquel and Cytopoint, new products such as Simparica and Stronghold Plus, and increased medicalization rates in key international markets such as China and Brazil should propel further growth.

Zoetis expects to generate more than $500 million in combined sales from Apoquel and Cytopoint in 2018. Oral parasite Simparica is expected to witness further growth. The company also expects to see more favorable conditions for livestock.

In July, Zoetis completed the acquisition of Caifornia-based Abaxis to augment its presence in the animal health diagnostics market, which is a fast-growing portion of the animal health industry. This is anticipated to boost sales. Further, updates on this acquisition are expected during fourth-quarter conference call.

We expect the company to throw more light other pipeline updates.

What Our Model Indicates

Our proven model does not conclusively show that Zoetis is likely to beat earnings in the to-be-reported quarter. This is because the stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Zoetis has an Earnings ESP of +1.52% as the Zacks Consensus Estimate is pegged at 77 cents, while the Most Accurate Estimate is pegged at 78 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Zoetis carries a Zacks Rank #4.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Zoetis Inc. Price and EPS Surprise

Zoetis Inc. Price and EPS Surprise | Zoetis Inc. Quote

 

Stocks That Warrant a Look

Here are some stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Acadia Pharmaceuticals Inc. ACAD has an Earnings ESP of +3.89% and a Zacks Rank #3.     

Aduro Biotech Inc. ADRO has an Earnings ESP of +15.23% and a Zacks Rank #2.

Amicus Therapeutics Inc. FOLD has an Earnings ESP of +10.07% and a Zacks Rank #3.

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