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Zoetis (ZTS) Valuation Check After $1.75 Billion Convertible Issue and 2026 Dividend Hike

Simply Wall St · 2d ago

Zoetis (ZTS) just gave investors a lot to chew on, completing a $1.75 billion convertible bond issue while also lifting its quarterly dividend by 6% for early 2026.

See our latest analysis for Zoetis.

Those financing moves come after a choppy stretch for the stock, with a 1 day share price return of 1.26% but a 1 year total shareholder return of minus 23.65%. This suggests longer term momentum has been fading even as management signals confidence.

If you are rethinking your healthcare exposure after Zoetis latest moves, it could be worth exploring other healthcare stocks that might fit your strategy.

With earnings still growing and the share price now trading at roughly a 30% discount to both analyst targets and intrinsic value estimates, is Zoetis quietly setting up a buying opportunity, or is the market already discounting future growth?

Most Popular Narrative Narrative: 27.2% Undervalued

With Zoetis last closing at $123.78 versus a narrative fair value near $170, the gap hints at sizeable upside if the thesis plays out.

Ongoing innovation and accelerated R&D output, with expectations for a major new product approval in a key market every year over the next few years, positions Zoetis to expand addressable markets, launch higher margin products, and protect market share, positively impacting organic revenue growth and net margins.

Read the complete narrative.

If you are curious what kind of revenue runway and margin lift could justify that valuation gap, and what future earnings multiple it quietly reflects, explore the full narrative.

Result: Fair Value of $169.96 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained competition in key franchises and lingering concerns around OA pain therapies could cap margin expansion and delay the earnings recovery embedded in forecasts.

Find out about the key risks to this Zoetis narrative.

Build Your Own Zoetis Narrative

If this perspective does not quite match your own view, or you would rather dig into the numbers yourself, you can easily build a custom narrative in just a few minutes: Do it your way.

A great starting point for your Zoetis research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.