Zoetis (ZTS) Stock Climbing Before Tomorrow’s Earnings Release

NEW YORK (TheStreet) -- Shares of Zoetis Inc. (ZTS) are higher by 1.82% to $45.42 in late afternoon trading on Monday, one day before the veterinary drug maker releases its 2015 first quarter earnings results. Zoetis will issue its financial report before the market open on Tuesday morning.

Analysts are expecting that the company will post a slight decline in its earnings per share data and revenue that is in-line with its year-ago first quarter results.

The company has been forecast to report earnings of 37 cents per share on revenue of $1.11 billion for the quarter ended March 2015.

Last year Zoetis said its adjusted earnings were 38 cents per share on revenue of $1.1 billion for the 2014 first quarter. The company's year ago earnings results improved from the 2013 first quarter by 6% and 1% respectively.

Based in Florham Park, NJ, Zoetis discovers, develops, manufacturers, and commercializes medicines and vaccines for animal health. The company focuses on both livestock and companion animals.

Separately, TheStreet Ratings team rates ZOETIS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ZOETIS INC (ZTS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ZOETIS INC has improved earnings per share by 19.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ZOETIS INC increased its bottom line by earning $1.16 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.16).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Pharmaceuticals industry average. The net income increased by 20.0% when compared to the same quarter one year prior, going from $105.00 million to $126.00 million.
  • Net operating cash flow has increased to $387.00 million or 29.86% when compared to the same quarter last year. In addition, ZOETIS INC has also vastly surpassed the industry average cash flow growth rate of -44.88%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 46.79% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • You can view the full analysis from the report here: ZTS Ratings Report

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