ZTS
Zoetis Inc.
$79.59
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 5.6% below fair value
You pay
$79.59
Bear
$72.24
Fair
$84.28
Bull
$96.32
Bear
$72.24
-9.2%
$6.02 × 12x P/E
Fair
$84.28
+5.9%
$6.02 × 14x P/E
Bull
$96.32
+21.0%
$6.02 × 16x P/E
Adjust Assumptions
14.0x
6.02$
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
13.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$85.43
Divergence from AlphaVal
1%
Summary
Applying a 14x P/E to adjusted EPS of $6.02, the base-case value is $84.28 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples