ZTS
Zoetis Inc.
$76.56
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 18.6% below fair value
You pay
$76.56
Bear
$80.59
Fair
$94.02
Bull
$107.46
Bear
$80.59
+5.3%
$6.21 × 12x P/E
Fair
$94.02
+22.8%
$6.21 × 14x P/E
Bull
$107.46
+40.4%
$6.21 × 16x P/E
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
12.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $110.57 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $94.02 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