5 models fit Zoetis Inc. Class A Common Stock and they disagree: 2 of 5 land within 15% of the average.
Two or more of our models back this value.
Near fair value(i)
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
ACCE opinionZoetis Inc. Class A Common Stock (ZTS)
Fair value (5 models)
$85.50
ACCE price target
$82.00
Rating
Fairly valued
Horizon
12 months
Fair value published on 18 Oct 2026, 17:04 CEST; previously $87.33 since 15 Oct 2026, 00:00 CEST.
ACCE price target published on 21 Sept 2026, 00:00 CEST.
Rating published on 18 Oct 2026, 17:04 CEST.
Price used: $81.03 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
5.2% below
+5.5% to fair value
ACCE score
50
out of 100
Analysts
41% buy
17 covering
P/E
13.5x
forward 12.0x
1-year return
-44.6%
Dividend yield
2.59%
Zoetis Inc. Class A Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Zoetis is the largest animal health company in the world, selling vaccines, parasiticides and therapeutics for companion animals (Simparica, Apoquel, Cytopoint) and livestock. Its moat rests on a recurring, prescription-driven franchise in dermatology and parasite control, where veterinarians steer dosing and switching is costly, which supports a 71.7% gross margin and a 40.7% operating margin. The near-term story is a pivot from flat top-line to margin and cash generation: revenue growth is -0.2%, yet the stock trades at 12.4x trailing and 11.6x forward earnings, a discount to where a business with a 64.9% ROE would normally sit. The valuation implies the market doubts the franchise can re-accelerate, so the question for us is whether the pipeline and pricing can return growth before the multiple compresses further. The score of 50/100 and absence from any index suggest the name is under-followed, which is worth a deeper look on the next product-cycle data.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
high
Leverage and capital structure
Debt/Equity of 2.85 is elevated for a healthcare compounder. Combined with modest FCF of $2.3B against $30.9B market cap, debt service flexibility is constrained.
moderate
Growth deceleration and margin risk
Revenue flat YoY (-0.2%) despite 7.2% 5y CAGR. ACCE Growth score collapsed to 19/100. Operating margin of 40.7% is strong but vulnerable if top-line stalls.
moderate
Score deterioration
ACCE score fell 3 points in 90 days (53 to 50). Growth component weakened sharply.
AI research notes
AI-assisted·How I use AIWritten Oct 11, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Trading at 12.0x forward earnings, well below the 23.6x sector median, despite 27.7% net margins and 64.9% ROE.
Consensus fair value of $88.80 implies 18.7% upside, with all 5 valuation models in agreement on the target.
Generates $2.3B in free cash flow with a 7.4% yield, while returning capital through 2.4% annual share buybacks.
Why it could disappoint
Revenue contracted 0.2% year over year despite a 7.2% five-year average, signaling recent momentum has stalled.
Debt to equity of 2.85 leaves limited cushion if pet or livestock spending weakens in an economic slowdown.
Current valuation implies only 3.7% annual cash flow growth over the next five years, a modest hurdle.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Nov 5, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
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Where ZTS's valuation models land
Price
$81.03
Model fair value
$85.50
Model range
$33.05 to $151
Fair value $85.50
Price $81.03
The price sits inside the model range.
Model
Fair value
Upside
Discounted cash flow
Dividend discount
EV/EBITDA comparison
Graham number
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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