operating margin
29–31 pct
FY 2023
official guidance
ZOETIS INC.
Last · —$75.29+0.99 (+1.33%)live · yahoo · 1h ago
Market cap$32.33B—
P/E · TTM12.9fwd — · eps —
Beta—vs S&P 500
Div yield—annual · TTM
52w range
——
Volume—session
| Revenue | $9.5B |
|---|---|
| Operating income | $3.3B |
| Net income | $2.6B |
| Free cash flow | $2.4B |
| Operating margin | 34.4% |
| Net margin | 27.5% |
| Return on equity | 83.1% |
| Period | TTM 2026-06-30 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Strong organic execution and capital returns outweigh manageable integration and claims volatility.
Buy: Voya delivered Q2 adjusted operating EPS of $1.67, with underlying EPS up 18% year over year, positive flows across all three businesses, and $1 billion of excess capital deployed in the first half. The AllianzGI deal adds 6%-8% expected 2023 cash EPS accretion, but near-term alternatives losses, Allianz distribution disruption, elevated Group Life severity, and some nonrecurring Wealth investment income temper the upside.
Themes
- Allianzgi Acquisition
- Investment Management Flows
- Alternatives Returns
- Wealth Solutions
- Health Solutions
- Capital Deployment
Near term
Investment Management alternatives returns in Q3 are guided to 0% to -6%, implying a potential loss of roughly $100 million and likely weaker earnings than Q2.
Wealth Q3 spread income should be slightly above Q1, but Q2 included investment-income items that management does not expect to repeat; quarterly expenses also benefited from timing and seasonality.
International Investment Management flows face a transition period as the NNIP/GSAM channel winds down and AllianzGI distribution ramps.
The $250 million accelerated share repurchase is expected to complete in Q3, while debt reduction will likely increase tactically to keep pace with buybacks.
Stop Loss growth slowed after a more competitive 1/1 renewal cycle; management expects better 7/1 performance but provided limited quantified detail.
Longer term
AllianzGI provides approximately $93 billion of acquired AUM, global distribution, and access to retail and international markets; the original $120 billion scope was reduced largely by adverse market conditions.
Investment Management margin is expected to rise from a projected 29%-31% in 2023 to 30%-32% in 2024, supported by scale, private credit, alternatives, and expense discipline.
Wealth Solutions has durable operating characteristics: trailing-12-month recurring deposits grew 11.2%, Q2 Full Service net inflows were $1 billion, and management maintained a 34%-36% margin target despite equity-market pressure.
Health Solutions retains a solid growth profile, with annualized in-force premiums up 9.3% and Voluntary premiums up 24%, although growth requires continued pricing discipline.
Capital generation and shareholder returns remain material supports, with approximately $700 million of excess capital at quarter-end and targeted free-cash-flow conversion of 90%-100%.
The internal CEO succession is low-disruption but still requires execution: Heather Lavallee intends to continue the existing three-year strategy rather than introduce major changes.
Red flags
Management declined to quantify the Q2 Wealth investment-income benefit, offering only that Q3 spread income should be slightly above Q1; the earnings baseline is therefore less transparent.
The AllianzGI distribution opportunity was described very positively, but management acknowledged that second-half international flows are less certain during the channel transition and did not quantify the ramp.
Q3 alternatives guidance spans from flat to a 6% decline, highlighting meaningful earnings volatility despite management's long-term return track record.
Group Life experienced about 30% more claims activity above $250,000, with the loss ratio at the top of target range; management expects the issue to remain within range but relies on limited visibility into severity.
Wealth expenses included favorable timing and payroll seasonality, while Health expenses remain elevated due partly to prior acquisitions and business growth, creating margin execution risk.
Stop Loss renewal competition caused Voya to walk away from business rather than sacrifice pricing, which protects underwriting quality but may constrain near-term growth.
Forward outlook
operating margin
30–32 pct
FY 2024
official guidance
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
From latest 10-K · 2026-02-12
- Modest Revenue Growth
- Generic Competition
- Draxxin Erosion
- Animal Health Demand
- Debt Increase
- Share Repurchase
- Manufacturing Risk
- Antimicrobial Regulation
Red flags
- Draxxin sales declined 66% in the U.S. from 2021, its first year of generic competition, indicating material exposure to loss of exclusivity.
- Livestock antibacterials generated approximately $713 million of 2025 revenue and face regulatory restrictions, antimicrobial-resistance concerns and changing consumer preferences.
- Debt increased to $9.15 billion from $6.65 billion, including $2.0 billion of 0.250% convertible senior notes due 2029 and $1.85 billion of 2025 senior notes due 2028-2035.
- The company reported a $42 million funded-status deficit in dedicated pension plans and accumulated other comprehensive loss of $834 million, though neither appears financially material relative to earnings.
Upcoming earnings
1:30 PM UTC+1
Period
Sep 2026
Est. EPS
$1.51
Est. revenue
2.3B
Earnings transcripts
- Motley Fool
Zoetis (ZTS) Q2 2026 Earnings Call Transcript
ZOETIS INC.
- Issuer IR
Full Transcript Second Quarter 2026
ZOETIS INC.
- Issuer IR
Operator^ Welcome to the First Quarter 2024 Financial Results Conference Call and
ZOETIS INC.
- Issuer IR
Full Transcript Third Quarter 2025
ZOETIS INC.
- Issuer webcast
Zoetis Fourth-Quarter and Full Year 2019 - Audio Webcast
ZOETIS INC.
- Issuer IR
Full Transcript - Fourth-Quarter and Full Year 2019
ZOETIS INC.
Documents
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