Zoetis: Leader in animal healthcare

Strong product momentum, a resilient business and a potential rerating

Welcome to the 22nd investment case and 19th resilience idea on Crack the Market (and the most comprehensive Zoetis investment case you will find online)! Join me as I dissect the leader in animal health, which has delivered strong organic growth (over and beyond its sector) for a decade+ thanks to world leading products/franchises, underpinned by a powerful innovation engine, sector leading margins and an attractive valuation despite good growth momentum.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 21 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

• CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.

• Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.

• Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.

• Halma (resilience idea): High quality compounder in safety, health and environmental technologies.

• Quanta Services (resilience & reshoring idea): Countercyclical compounder riding a multi decade infrastructure buildout.

• Infineon (China idea): Power semiconductor leader with strong structural drivers (AI power and China auto) amidst a cyclical recovery.

• Hubbell (resilience & reshoring idea): Pure play on US electrification demand driven by AI and grid investment cycle.

• Iberdrola (resilience & reshoring idea): Best integrated utility in the world with a stellar track record and solid growth driven by networks and renewables

• Nvidia (AI & data center idea): The backbone of the AI world is unstoppable.

• Veolia (resilience & reshoring idea): Resource management giant (water, waste, energy) due for a rerating.

• TJX (resilience idea): The retail giant that keeps winning.

• DSM-Firmenich: The diversified ingredient powerhouse benefiting from a transformational deal.

After reading this article, you will understand why this company is so special thanks to unique innovation engine at the heart of global animal health, what it does, why it has such a powerful growth algorithm, why the sector is so defensive, why the company’s franchises are benefiting from good momentum and why the valuation has been hit by some bad press that is underserved.

In this article I go through:

1. Zoetis’ business and how its portfolio dominates the animal health space.

2. How the company’s incredible innovation capabilities will keep it at the forefront of the industry.

3. How the company aims to continue to outgrow the sector thanks to its companion animal business.

4. Why its momentum remains strong thanks to the ongoing growth of its core products/franchises.

5. Why the fears around one of its start franchises are unfounded.

Zoetis Investment Case