Zoetis forecasts upbeat 2026; pet‑care market pressure drags shares

By Sahil Pandey

Feb 12 (Reuters) - Zoetis ZTS.N on Thursday forecast 2026 adjusted profit and revenue above Wall Street estimates, but shares dropped 5% after executives cautioned that its companion-animal business in the U.S. remains under pressure and competition is intensifying across several major drug categories.

CEO Kristin Peck said on a call with analysts that Zoetis continues to see economic pressure on Gen Z and Millennial pet owners, which has contributed to a decline in therapeutic visits and doses, even as emergency and urgent care continue to show strength.

"This reinforces our view that this is not a decline in underlying demand for care, but rather greater price sensitivity and tighter household budgets when it comes to the cost of routine care," said Peck.

Pet owners have been cautious on routine wellness or preventive checkups for the past few quarters, while non-wellness visits which diagnose specific health conditions have been less pressured.

Industry peer IDEXX Laboratories IDXX.O last week also said veterinary clinic visits will continue to remain under pressure.

Leerink Partners analyst Daniel Clark said that while the headline forecast was ahead of expectations, some of Zoetis' key growth engines — including Simparica Trio, dermatology products and its osteoarthritis pain antibodies — came in 'lighter than expected'.

For full-year 2026, the animal health company expects adjusted earnings of $7.00 to $7.10 per share, above analysts' estimate of $6.80, according to LSEG-compiled data.

It forecast revenue of $9.83 billion to $10.03 billion, with the midpoint ahead of Wall Street's view of $9.91 billion.

Companion-animal revenue grew 2% to $1.60 billion, while livestock revenue rose 4% to $756 million.

The company's adjusted profit per share of $1.48 for the fourth quarter, surpassed estimates of $1.40. Revenue rose 3% to $2.39 billion, topping expectations of $2.36 billion.