One day after unveiling quarterly results that disappointed the market and engendered a stock sell-off, Zoetis (ZTS -4.49%) shares again tumbled. As of late-session trading on Friday, they were down by 4%, in no small part due to several analyst price target cuts. Meanwhile, the benchmark S&P 500 (^GSPC -0.01%) essentially traded sideways on the day.
Not-so-good guidance
Zoetis slightly topped analyst estimates for profitability and met those for revenue in its fourth quarter. But as investors know, stocks overwhelmingly trade more on future potential than historical performance. The problem was that the animal healthcare specialist’s full-year 2025 revenue and earnings guidance came well short of the consensus pundit projection.
So it didn’t come as a major shock on Friday when several of those analysts weighed in with new, more bearish takes on Zoetis.
Among the more influential companies wielding the scissors were white-shoe investment bank Morgan Stanley and Bank of America Securities. The former’s Erin Wright reduced her price target by $5 per share to $230, and the latter’s Michael Ryskin cut his to $200 from the previous $205. Both analysts maintained the equivalent of buy recommendations on the stock, however.
An outlier makes a cautious raise
Not every new analyst action on Zoetis Friday was a price target cut. Barclays, in the form of prognosticator Balaji Prasad, upped its fair value assessment slightly to $244 per share from the preceding $242. Prasad maintained an overweight (buy, in other words) recommendation.
The fairly minor cuts and increase show that Zoetis’s fourth quarter was neither disastrous nor outstanding. I think the company runs a solid business, yet neither its recent growth rates nor its valuations are particularly compelling at the moment.
Bank of America is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Zoetis. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
