Zoetis (NYSE:ZTS) shares rose roughly 3% following the release of fourth-quarter results that exceeded analyst expectations and a fiscal 2026 outlook that came in above consensus. The animal health company reported adjusted earnings per share of $1.48 for the quarter, compared with analysts' estimates of $1.40 compiled by LSEG.
The company attributed the quarterly outperformance primarily to stronger-than-expected revenue and improved gross margins. Zoetis' guidance for fiscal 2026 calls for adjusted EPS in a range of $7.00 to $7.10; the midpoint of that range sits above Wall Street's $6.80 expectation. Management also projected 2026 revenue between $9.825 billion and $10.025 billion, modestly higher than the consensus figure of $9.914 billion.
Market reaction was positive, but not unanimous among analysts. Stifel noted specific elements behind the quarterly figures and cautioned that some of the upside may be tied to temporary factors. In their commentary, Stifel wrote: "Zoetis reported 4Q25 organic operational revenue growth of +4%, slightly above our 3.2%E. However, there was a tailwind to 4Q25 revenue results (specific to International), which makes the top-line likely slightly below. For EPS, the company posted $1.48 above our/Street $1.39/$1.40 estimates. We believe $0.07 of the $0.09 beat relative to our estimate came at the EBIT line, with the higher revenue aided by GM of 70.3% versus our 69.3%E. On the margin, we are a bit underwhelmed by the components to the 4Q25 beat. The upside came from Livestock, but that was aided by the alignment tailwind," Stifel wrote.
That assessment highlights two drivers emphasized in the quarter - international contributions to revenue and results in the Livestock segment - while questioning the durability of those effects. Despite such reservations, Zoetis' combination of a quarterly beat and a guidance range that sits above consensus appears to have been sufficient to lift investor sentiment in the immediate aftermath of the release.
The results and guidance are relevant to investors focused on the animal health sector and to participants in markets sensitive to corporate margin dynamics and revenue composition. Zoetis' update provides a clear set of headline numbers for fiscal 2026 while leaving room for debate over the underlying quality of the reported outperformance.
Bottom line: Zoetis delivered a fourth-quarter adjusted EPS beat and issued fiscal 2026 guidance that nudges past analyst expectations, but some market commentators caution that international and livestock-related tailwinds contributed materially to the upside.