Zoetis at Morgan Stanley conference: pipeline offsets near-term pressure

On September 14, 2026, Zoetis presented its latest outlook at the Morgan Stanley 24th Annual Global Healthcare Conference. The company reported a softened outlook for the companion animal care market, but emphasized that its extensive pipeline of new products could sustain growth for years to come. Zoetis' new CFO and COO, Jay Tiakara, along with CEO Kristin Peck, discussed the company's challenges in the pet care sector, which is experiencing its first industrywide decline.

The company's revenue outlook for 2024 has been revised downward to a range of negative 3% to negative 1%, down from the previous forecast of positive growth of 2% to 5%. Management attributed this downward revision to a weaker companion animal market and increasing competition in key categories.

Peck emphasized that the company is not facing structural issues in the pet care market, but rather a cyclical environment. Despite this, Zoetis remains confident in its August guidance and plans to update investors in November. The company is countering competition through targeted promotions rather than broad price cuts, focusing on parasiticides and dermatology products.

Zoetis highlighted its long-term pipeline, which includes chronic kidney disease, oncology, and next-generation animal health products, which are expected to drive growth for years. The livestock segment is providing a significant offset to the pressure in the U.S. companion animal business, with growth driven by factors such as higher protein consumption and GLP-1 adoption.

The stock has been impacted by near-term pressures, trading at $73.60 near its 52-week low of $71 and down 41% year-to-date. However, InvestingPro analysts suggest that the stock is currently undervalued and appears on the platform's Most Undervalued list. Zoetis' net price realization for the full year is expected to be negative 1% to negative 2%.

Despite the challenges, the company maintains a P/E ratio of 12.01 and offers a dividend yield of 2.91%. Zoetis has raised its dividend for 13 consecutive years, demonstrating its financial resilience even during challenging periods.