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Is a Beat in Store for Zoetis (ZTS) This Earnings Season?

Zoetis Inc. ZTS is scheduled to report third-quarter 2018 results on Nov 1, before the opening bell.

Zoetis' performance has been impressive, with the company surpassing expectations in all of the previous four quarters, the average positive earnings surprise being 5.83%.

Zoetis' share price movement shows that the stock has outperformed the industry on a year-to-date basis. The stock has rallied 23.2% against the industry's decline of 10%.

What Our Model Indicates

Our proven model shows that Zoetis is likely to beat on earnings in the to-be-reported quarter because it has the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Zoetis has an Earnings ESP of +0.43% as the Zacks Consensus Estimate is pegged at 77 cents, while the Most Accurate Estimate is pegged at 78 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Zoetis carries a Zacks Rank #3 which when combined with a positive Earnings ESP makes us reasonably confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Let's see how things are shaping up for this announcement.

Factors to Consider

Zoetis derives majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company continues to strengthen its diverse products portfolio through lifecycle innovations, strong customer relationships, and access to new markets and technologies.

The company expects to generate more than $500 million in combined sales from Apoquel and Cytopoint in 2018. Oral parasite Simparica is expected to witness further growth in the remainder of 2018. The company also expects to see more favorable conditions for livestock.

The company expects to see stronger growth from its companion animal portfolio in 2018, driven by its dermatology portfolio, Apoquel and Cytopoint, further penetration of Simparica, and ongoing uptake of new vaccines.

In July the company completed the acquisition of Caifornia-based Abaxis to augment its presence in the animal health diagnostics market, a fast-growing portion of the animal health industry. This is anticipated to boost sales. Further, updates on this acquisition are expected during third-quarter conference call.

We expect the company to throw more light on its Abaxis acquisition plan and other pipeline updates.

Zoetis Inc. Price and EPS Surprise

Zoetis Inc. Price and EPS Surprise | Zoetis Inc. Quote

Stocks That Warrant a Look

Here are some drug/biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Amgen Inc. AMGN is scheduled to release third quarter results on Oct 30. The company has an Earnings ESP of +0.56% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

AMAG Pharmaceuticals Inc. AMAG is expected to report third quarter results on Nov 1. The company has an Earnings ESP of +13.76% and a Zacks Rank of 3.

Alnylam Pharmaceuticals Inc. ALNY is expected to report third quarter earnings on Nov 6. The company has an Earnings ESP of +2.88% and a Zacks Rank of 3.

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AMAG Pharmaceuticals, Inc. (AMAG): Free Stock Analysis Report

Alnylam Pharmaceuticals, Inc. (ALNY): Free Stock Analysis Report

Amgen Inc. (AMGN): Free Stock Analysis Report

Zoetis Inc. (ZTS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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