Zoetis (ZTS) Stock Drops 20% as Pet Owners Tighten Their Belts

TLDR

• Zoetis stock fell 20% to $88.94 on Thursday, its worst S&P 500 performance of the session
• Q1 EPS came in at $1.53, missing the $1.60 Wall Street estimate; revenue of $2.26B missed the $2.3B consensus
• The company cut full-year EPS guidance to $6.85–$7.00, down from $7.00–$7.10
• CEO cited increased pet owner price sensitivity and fewer vet visits as key headwinds
• Stifel analysts said results are “worse than it seems” due to a $100M revenue boost from a one-time fiscal realignment

Zoetis (ZTS) stock dropped 20% to $88.94 on Thursday, making it the worst performer in the S&P 500 for the session. According to Dow Jones Market Data, the stock is now on pace for its lowest close in over seven years, and is down 29% year-to-date.

Zoetis Inc., ZTS

The sell-off came after the animal health company reported first-quarter results that missed on both the top and bottom lines.

Q1 earnings came in at $1.53 per share, up from $1.48 a year ago but below the $1.60 Wall Street expected. Revenue grew 3% year-over-year to $2.26 billion, short of the $2.3 billion analyst consensus, per FactSet.

CEO Kristin Peck said the quarter played out in a tougher environment than the company had planned for. Pet owners pulled back on spending, leading to fewer vet visits and weaker demand for premium products.

U.S. revenue fell roughly 8% year-over-year to $1.1 billion. Companion animal product sales in the U.S. dropped about 11%, hit by softer demand and competition.

International Segment Offered Some Relief

International revenue grew 17% year-over-year to $1.1 billion, helped by a 10% rise in companion animal product sales. The parasiticides portfolio was a key driver of that growth.

However, that international number included an estimated $100 million in revenue pulled forward from a fiscal year alignment change. The company eliminated a one-month reporting lag for its overseas units, effectively boosting Q1 international results in a way that won’t repeat.

Analysts Say It’s Worse Than It Looks

Stifel analyst Jonathan Block and his team said the Q1 report is actually “worse than it seems.” Once that $100 million realignment benefit is stripped out, organic operational revenue growth came in well below consensus.

Block’s team pointed to “notable weakness” in the pet business segment as a particular concern.

Zoetis responded by cutting its 2026 full-year outlook. The company now expects adjusted EPS of $6.85 to $7.00, down from its prior range of $7.00 to $7.10. Wall Street had been modeling $7.03.

Full-year revenue guidance was also lowered to between $9.68 billion and $9.96 billion, from the previous range of $9.825 billion to $10.025 billion. The analyst consensus sat at $9.89 billion.

The stock’s 20% single-day drop now has ZTS sitting at levels not seen since early 2019.

Adjusted EPS of $1.53 reflected roughly 9% year-over-year growth, but still missed the consensus estimate by $0.09.

Thursday’s move puts the full-year decline at 29%, a tough stretch for a stock that was once considered a steady compounder in the healthcare space.

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