New Spinoff Is Getting Attention
03/18/2013 7:45 am EST
This company formerly owned by Pfizer may not have the most interesting line of work, but it is attracting a lot of analysts...and they're flashing buy ratings, writes Jake L’Ecuyer of MSN Money.
Both Bank of America and Goldman Sachs unleashed the company with "neutral" ratings, with price targets of $35 and $33, respectively. Morgan Stanley named it a “hold,” with no price target.
On the bullish side were the four "buy" sentiment ratings:
- Deutsche Bank initiated the company with a "buy" rating and $38 price target, focusing on Zoetis' domination of the veterinary markets and being positioned to benefit from the strong demand growth for animal protein, mixed with limited resources which will require increased efficiency in farming.
- Piper Jaffray gave Zoetis an "overweight" rating and $40 price target, based on mid-to-high single digit growth that doesn't rely on government reimbursement, a stable and mature industry with strong demand, and the scarcity value that a large-cap animal health stock provides. Piper also outlined that it looks at the company as an animal health industry name, and not a pharmaceutical name as many others do.
- JP Morgan initiated Zoetis with an "overweight" rating and a slightly less-aggressive price target of $39. Its report focused on Zoetis' domination of the animal health industry, its advantages over traditional pharmaceutical plays, and significant margin expansion growth potential coming from its direct sales infrastructure and industry leading R&D.
- Jefferies issued a "buy" rating and $40 price target, and highlighted it as a great opportunity to capitalize on the demand for animal protein and companion animal medical markets. The report also cited the scarcity value of the stock as a large cap animal health play.
Overall, the "hold" equivalent ratings seemed weak. They presented bullish cases, but refused to act on them with "buy" ratings. The "buy" equivalent ratings were stronger, with the ratings from Piper Jaffray and Jefferies presenting the most interesting takes to the bullish side.