Zoetis Posts Solid Second-Quarter Performance; No Change to Our Fair Value Estimate

Zoetis reported solid second-quarter results and it remains on track to meet our full-year expectations, and our fair value estimate is unchanged. Though Zoetis pulled down the upper end of its revenue outlook for 2022, our projection remains bounded by the new estimates. We see little to knock this animal healthcare juggernaut off its game, and remain confident in Zoetis’s wide economic moat. While its enviable cost structure underpins its moat, we think intangible assets, and specifically, this firm’s ability to bring revolutionary innovation to commercialization is perhaps its greatest competitive weapon.