Insiders and Institutions Snap Up Zoetis Shares at Steep Discount as US Pet Sales Slump

Despite a 52% annual selloff, Zoetis insiders and institutions like Vanguard are buying. Analyst consensus target of $135 implies 96% upside. FDA approvals boost livestock segment.

The selloff in Zoetis has been brutal — the stock has shed 36.07% since the start of the year and 52.65% over the past twelve months, currently trading near €68.70. Yet behind that dramatic markdown, a different story is unfolding. Company insiders and some of the world’s largest asset managers are quietly building positions, signalling a conviction that the worst may be priced in.

The first-quarter earnings report that triggered much of the recent damage fell short of expectations. Revenue came in at $2.26 billion, with adjusted earnings per share of $1.53 missing analyst forecasts. The culprit was unmistakable: Zoetis’ US companion animal segment, long considered a pillar of stability, posted an 11% revenue decline. Pet owners, apparently tightening their budgets, are delaying routine veterinary visits and elective treatments, a trend that has forced Wall Street to rethink its assumptions about the business’s resilience.

That rethink has been swift and sharp. Citigroup, while maintaining its buy rating, slashed its price target from $145 to $112. Morgan Stanley also stuck with an “Overweight” recommendation but lowered its target to $115. The average analyst estimate, compiled from 18 experts, now stands at $134.75 — nearly double the current share price — though the consensus rating sits at “Moderate Buy,” reflecting a split between cautious holders and more optimistic bulls.

Company insiders, however, are voting with their own capital. In mid-May, Director Frank A. Damelio purchased shares at an average price of $75.39, and fellow board member Paul Bisaro bought at a similar level. Those acquisitions, made at a steep discount to the stock’s 52-week high, signal a belief that the business fundamentals remain intact despite the cyclical headwinds in the US pet market.

Institutional investors have been even more aggressive. The Vanguard Group added roughly 5.5 million shares to its Zoetis holdings during the first quarter. Fairtree Asset Management increased its position by 82%, and Harvest Portfolios also piled in. In total, institutional and hedge fund ownership has swelled to nearly 93% of all outstanding shares — a level that suggests the selloff is being absorbed by deep-pocketed investors rather than triggering a cascade of panic selling. Not every large holder is buying, however; Investment House LLC cut its stake by half over the same period.

On the operational side, Zoetis has secured tangible bright spots. The US Food and Drug Administration granted an emergency-use authorization for its Doramectin injection, sold as Dectomax and Dectomax-CA1, to combat infestations of the New World screwworm. The approval covers cattle, swine, horses, sheep, and deer, giving the company a near-term tailwind in its livestock business. Separately, the FDA also issued a conditional nod for a smaller 100-milliliter bottle, providing veterinarians and producers with greater dosing flexibility.

Still, the livestock wins do little to address the core problem facing the pet business — the company’s largest revenue driver. Zoetis has guided for full-year 2026 revenue of $9.68 billion to $9.96 billion, with adjusted earnings per share in a range of $6.85 to $7.00. Management is counting on the integration of Neogen’s animal genomics business, expected to be completed in the second half, and a pipeline of monoclonal antibodies targeting chronic pet conditions to help offset pricing pressure in the US veterinary market.

The next major test comes in August, when Zoetis reports second-quarter results. By then, investors will want to see whether the pet-business downturn has stabilised or deepened, and whether the institutional buying now underway will prove prescient — or just early.