Zoetis trades 45% below fair value despite solid Q1 growth and dividend prospects

Zoetis Inc. is currently trading at a 45% discount to its fair value, despite showing resilient fundamentals and promising long-term growth. In Q1 2026, the company reported 2.9% revenue growth and 8.5% adjusted EPS growth, driven by livestock sales that offset weakness in domestic pet care. Its forward price-to-earnings ratio of 10.5 is significantly below its 10-year average, with a justified fair value multiple of 19 based on a 7.5% EPS growth consensus. Additionally, Zoetis offers a 2.8% dividend yield with a low payout ratio, supporting continued dividend growth even amid U.S. market softness and competitive risks.