Thursday, March 16, 2017

Zoetis: A Well-Loved Leader

A company with leading share in almost every relevant segment of a $24 billion market, strong margins, and strong barriers to entry arguably should trade at healthy multiples, so I can't say that the valuation of Zoetis (NYSE:ZTS) comes as much of a surprise. What's more, the company isn't done growing and expanding, as the company can still target share growth in Europe, market growth in emerging markets like China, margin improvement, and expansion into adjacent markets/products. Even so, the valuation gives me pause, as I believe it already factors in strong growth and over $2.1 billion in free cash flow in 2026.

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Zoetis: A Well-Loved Leader

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