- Piper Sandler has initiated Zoetis ( NYSE: ZTS ) and IDEXX Laboratories ( NASDAQ: IDXX ) with overweight ratings as the selloff in the animal health sector has provided a buying opportunity.
- The firm has a price target of $205 for Zoetis ( ZTS ) (~18% upside based on Tuesday's close) and a $440 price target for IDEXX ( IDXX ) (~21% upside).
- Analyst David Westenberg said that investors should focus on companion animal health companies versus food animal ones as pet owners are willing to pay a premium for innovative products.
- He believes that Zoetis ( ZTS ) has 500 basis points of operating margin expansion potential over the next 10 years.
- IDEXX ( IDXX ) also offers margin expansion, Westenberg added, and both companies "check the boxes of heavy veterinary focused companion products."
- Elanco Animal Health ( NYSE: ELAN ) and Neogen ( NASDAQ: NEOG ), which are more focused on farm animal health, were initiated at neutral by Westenberg.
- Read why Seeking Alpha contributor Marcel Knoop argues that IDEXX ( IDXX ) is overvalued.
For further details see:
Zoetis, IDEXX named as buys in animal health space by Piper Sandler