Is Zoetis Stock Underperforming the Dow?

As a leader in animal health, Zoetis Inc. (ZTS) discovers, develops, manufactures, and commercializes medicines, vaccines, diagnostic products, services, biodevices, genetic tests, and precision animal health tools. It is headquartered in Parsippany, New Jersey, and carries a market capitalization close to $53.8 billion.

With direct marketing operations in roughly 45 countries across North America, Europe, Africa, Asia, Australia, and South America, it stands firmly in “large-cap” territory, a tier reserved for companies valued at $10 billion or more.

Even so, ZTS stock has been traveling a tougher road lately.  Zoetis’ shares have slipped 32.4% from their December 2024 peak of $181.85, and the past three months alone delivered a 21.6% plunge. Dow Jones Industrial Average ($DOWI), meanwhile, climbed 2.6% over the same stretch. While the broader market has been finding its stride, ZTS has been working through a challenging cycle.

The longer view reinforces that theme. Over the past 52 weeks, ZTS stock dropped 30.6%. Over that same period, the Dow rose 3.8%. In 2025 alone, ZTS plummeted 24.6% on a year-to-date (YTD) basis while the Dow rose 9.2%.

Since mid-September, ZTS has also traded consistently below its 50-day and its 200-day moving averages. That stretch under both key averages signals persistent bearish momentum.

Zoetis’ Q3 fiscal 2025 earnings, released on Nov. 4, did little to steady investor nerves. Shares sank 13.8% that day as the weak outlook overshadowed otherwise solid results. Revenue marginally grew year over year (YoY) to $2.4 billion, landing right in line with analyst expectations. Adjusted EPS rose 7.6% from the year-ago period to $1.70, comfortably above the consensus estimate.

The reaction made sense once the company trimmed its full-year sales outlook. Zoetis’ management now expects $9.4 billion to $9.475 billion in fiscal 2025 revenue, a step down from prior guidance. The revision reflects softening demand for medicines and vaccines for pets and livestock, particularly products tied to pigs and chickens.

However, ZTS regained momentum on Nov 21, jumping 5.3% after KeyBanc initiated coverage with a “Sector Weight” rating. Analyst Steve Dechert set a $175.04 price target, signaling confidence in Zoetis’ potential to outperform as conditions stabilize and reinforcing expectations that the stock will track its broader animal health sector.

Putting ZTS’ path in context becomes easier when compared with its rival, Dr. Reddy’s Laboratories Limited (RDY). RDY stock declined 3.8% over the past 52 weeks, and in 2025, it slipped 13.5%. The broader takeaway is that pockets of the healthcare and pharmaceutical landscape have been facing their own challenges, and ZTS is not moving in isolation.

Despite its lackluster price action, analysts think ZTS can break out to new highs in the next year. The stock has a consensus rating of “Moderate Buy” from the 16 analysts in coverage. But that’s a downgrade from a “Strong Buy” rating a month ago. The mean price target of $172.28 represents a premium of 40.2% to current levels.

On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com