Stifel Downgrades Zoetis (ZTS) Stock, Reduces PT

Zoetis Inc. (NYSE:ZTS) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, Stifel analyst Jonathan Block downgraded Zoetis Inc. (NYSE:ZTS)’s stock to “Hold” from “Buy,” reducing the price objective to $160 from $165. The firm warned that revenue growth might fall short of Wall Street expectations over the upcoming 2 years as competition intensifies throughout key product categories. While there are longer-term opportunities in oncology and kidney disease, the firm believes that these markets will develop more slowly.

A veterinarian administering a vaccine to a herd of cattle in a farm.

As per the firm, while Zoetis Inc. (NYSE:ZTS) dealt effectively with competition in the past, this time the competition might prove to be more successful. Stifel’s survey identified that there is robust veterinarian interest in Merck’s pending Atopic Dermatitis JAK inhibitor and Elanco’s CQ – chloroquine. However, Zoetis Inc. (NYSE:ZTS) continues to advance innovation and care for animals throughout the globe.

Simparica Trio gained a new label indication in the US to prevent Dipylidium caninum (flea tapeworm) infections by killing Ctenocephalides felis vector fleas in treated dogs. Now, Simparica Trio happens to be the only canine combination parasiticide indicated to prevent flea tapeworm infections, at the source, by killing vector fleas before the transmission.

Polen Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Zoetis Inc. (NYSE:ZTS) and Adobe were also notable absolute detractors. Zoetis has been posting excellent growth on the back of its pain and dermatology franchises for quite some time, and its core companion animal business has been firing on all cylinders. Despite this, the stock has come under pressure due to concerns about the growth prospects of Librela, its biologic drug for pain in dogs (as well as Solensia, the sister drug for cats). There has been some concern about the side effects of these drugs, but the data disclosed thus far shows a very low level of adverse events, with drugs that prove highly effective in treating pain. We expect strong growth from these and other drugs currently marketed by Zoetis, with more to come from its prolific pipeline. We used the recent weakness to add to our position.”

While we acknowledge the potential of ZTS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ZTS and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.