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Zoetis Inc – Pharmaceutical Preparation Manufacturing
Zoetis is the leading animal health company, dedicated to supporting its customers and their businesses. Building on more than 65 years of experience in animal health, Zoetis discovers, develops, manufactures and commercializes medicines, vaccines and diagnostic products, which are complemented by biodevices, genetic tests and precision livestock farming. Zoetis serves veterinarians, livestock producers and people who raise and care for farm and companion animals with sales of its products in more than 100 countries. In 2019, the company generated annual revenue of $6.3 billion with approximately 10,600 employees.
Analysis Results
Intrinsic Value $389.41
Latest Price $166.24
Relative Value 57% undervalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 18.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 18.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 3.25 3.14
2024 3.85 3.61
2025 4.57 4.15
2026 5.42 4.77
2027 6.43 5.48
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 193 billion. This corresponds to a present value of 159 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 21.2 billion. Adding in the terminal value gives a total present value of 180 billion.

There are presently 463.0 million outstanding shares, so the intrinsic value per share is 389.41.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 7,506,000,000
Current Cash 3,581,000,000
Current Liabilities 3,167,000,000
Current Debt 1,352,000,000
Non-Cash Working Capital (NCWC) 2,110,000,000
Change in NCWC 462,000,000
EBIT 2,932,000,000
Tax Provision 545,000,000
Depreciation and Amortization 465,000,000
Capital Expenditure -586,000,000
Unlevered Free Cash Flow 2,671,365,963
Current Assets 6,930,000,000
Current Cash 3,485,000,000
Current Liabilities 1,797,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,648,000,000
Change in NCWC 207,000,000
EBIT 2,813,000,000
Tax Provision 454,000,000
Depreciation and Amortization 448,000,000
Capital Expenditure -477,000,000
Unlevered Free Cash Flow 2,477,695,337
Current Assets 6,611,000,000
Current Cash 3,604,000,000
Current Liabilities 2,170,000,000
Current Debt 604,000,000
Non-Cash Working Capital (NCWC) 1,441,000,000
Change in NCWC -67,000,000
EBIT 2,281,000,000
Tax Provision 360,000,000
Depreciation and Amortization 441,000,000
Capital Expenditure -453,000,000
Unlevered Free Cash Flow 1,790,597,194
Current Assets 4,748,000,000
Current Cash 1,934,000,000
Current Liabilities 1,806,000,000
Current Debt 500,000,000
Non-Cash Working Capital (NCWC) 1,508,000,000
Change in NCWC 24,000,000
EBIT 2,034,000,000
Tax Provision 301,000,000
Depreciation and Amortization 412,000,000
Capital Expenditure -460,000,000
Unlevered Free Cash Flow 1,670,058,856
Current Assets 4,399,000,000
Current Cash 1,701,000,000
Current Liabilities 1,223,000,000
Current Debt 9,000,000
Non-Cash Working Capital (NCWC) 1,484,000,000
Change in NCWC -75,000,000
EBIT 1,909,000,000
Tax Provision 266,000,000
Depreciation and Amortization 308,000,000
Capital Expenditure -338,000,000
Unlevered Free Cash Flow 1,503,530,177
Current Assets 4,217,000,000
Current Cash 1,564,000,000
Current Liabilities 1,094,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,559,000,000
Change in NCWC 13,000,000
EBIT 1,737,000,000
Tax Provision 663,000,000
Depreciation and Amortization 242,000,000
Capital Expenditure -224,000,000
Unlevered Free Cash Flow 1,012,832,131
Current Assets 3,390,000,000
Current Cash 727,000,000
Current Liabilities 1,117,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,546,000,000
Change in NCWC 246,000,000
EBIT 1,427,000,000
Tax Provision 409,000,000
Depreciation and Amortization 240,000,000
Capital Expenditure -216,000,000
Unlevered Free Cash Flow 1,221,720,684
Current Assets 3,830,000,000
Current Cash 1,154,000,000
Current Liabilities 1,781,000,000
Current Debt 405,000,000
Non-Cash Working Capital (NCWC) 1,300,000,000
Change in NCWC -204,000,000
EBIT 1,094,000,000
Tax Provision 206,000,000
Depreciation and Amortization 199,000,000
Capital Expenditure -224,000,000
Unlevered Free Cash Flow 451,488,073
Current Assets 3,465,000,000
Current Cash 882,000,000
Current Liabilities 1,086,000,000
Current Debt 7,000,000
Non-Cash Working Capital (NCWC) 1,504,000,000
Change in NCWC 157,000,000
EBIT 1,001,000,000
Tax Provision 233,000,000
Depreciation and Amortization 204,000,000
Capital Expenditure -180,000,000
Unlevered Free Cash Flow 897,569,512
Current Assets 3,357,000,000
Current Cash 610,000,000
Current Liabilities 1,415,000,000
Current Debt 15,000,000
Non-Cash Working Capital (NCWC) 1,347,000,000
Change in NCWC -150,000,000
EBIT 843,000,000
Tax Provision 187,000,000
Depreciation and Amortization 209,000,000
Capital Expenditure -184,000,000
Unlevered Free Cash Flow 489,534,782

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