Jun. 20 at 7:00 PM
$ZTS A few things to note:
- Gen-z/Millennials are driving humanization of pets (I treat my two tuxedo cats like my children).
- Higher income households often have more than one pet and are willing to spend, even during economic downturns.
- Strong pricing power via cash-paid business (owners, vets) typically pay out of pocket for medicines and vaccines, which makes them more selective and discerning. Therefore the products much provide clear and tangible value (i.e., Librela).
- Largest R&D budget in the companion animal industry (nearly 8% of revenues).
Downgrade is likely due to lower-margin emerging-market sales will make up an increasing portion of the company sales, potentially creating a headwind to ZTS margins (~20% sales via Emerging Mkts). Also, increased competition in derm.
Will be adding in this range.
