On 12 Nov 2026 our base value for Zoetis is $91.68 a share, 10.5% above its $82.96 close; 1 of 1 valuation methods put it above the price.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $91.68 | +10.5% | free cash flow $2.28bn, growth -1.3% for 5 years, then fading to 3% over 5 more, discounted at 7.74%; stress floor $68.10 |
| Exit multiple (P/E) | — | — | no exit multiple: the five-year median of 29.4x is 2.2x the 13.2x this name trades at today (limit 1.5x) — the market has re-rated the name, so its own history prices a business it is no longer paid for. The forward PE is not a substitute: it is today's price divided by earnings, and an anchor built from it can only restate the price |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.67 (5 years of monthly returns against the S&P 500; standard error 0.23) |
| Peer beta | 0.26 (median of 6 S&P 500 Pharmaceuticals companies) |
| Blend of own and peers | 0.37 (27% own, 73% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.58 (0.67 × 0.37 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 7.74% |
Free cash flow grows -1.30% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $2.28bn | — | — |
| Year 1 | -1.30% | $2.25bn | 0.9282 | $2.09bn |
| Year 2 | -1.30% | $2.22bn | 0.8615 | $1.91bn |
| Year 3 | -1.30% | $2.19bn | 0.7996 | $1.75bn |
| Year 4 | -1.30% | $2.16bn | 0.7422 | $1.60bn |
| Year 5 | -1.30% | $2.13bn | 0.6888 | $1.47bn |
| Year 6 | -0.58% | $2.12bn | 0.6393 | $1.36bn |
| Year 7 | 0.13% | $2.12bn | 0.5934 | $1.26bn |
| Year 8 | 0.85% | $2.14bn | 0.5508 | $1.18bn |
| Year 9 | 1.57% | $2.18bn | 0.5112 | $1.11bn |
| Year 10 | 2.28% | $2.23bn | 0.4745 | $1.06bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (7.74% − 3%) | $48.36bn |
| Terminal value in today's money | $22.95bn |
| Present value of years 1–10 | $14.79bn |
| Total present value | $37.73bn |
| Shares outstanding | 411.60m |
| Value per share = total ÷ shares | $91.68 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth -6.3% | Growth -1.3% | Growth 3.7% |
|---|---|---|---|
| 6.74% | $82.72 | $115.17 | $159.47 |
| 7.74% | $66.65 | $91.68 | $125.66 |
| 8.74% | $56.12 | $76.34 | $103.64 |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.67 | 8.14% | $84.75 |
| Peer beta | 0.26 | 6.30% | $129.99 |
| Adjusted beta (used) | 0.58 | 7.74% | $91.68 |
The base value is the average of the methods kept in it:
| Method | Value |
|---|---|
| Discounted cash flow | $91.68 |
One method is kept, so the base value is its value: $91.68
Base value $91.68 a share
One-year price simulation: a 10% chance the price is below $52.92 and a 10% chance it is above $132.84 in a year; a 52% chance it is higher than today's $82.96, from 35.73% volatility. The simulation assumes the price drifts up at our discount rate of 7.74% a year.
At $82.96 the price implies free cash flow growing -2.9% a year for five years and then fading toward 3% over five more; its revenue has grown -1.3%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $69.69 | $83.76 |
| 9 Oct 2026 | $74.81 | $83.92 |
| 16 Oct 2026 | $79.38 | $96.18 |
| 23 Oct 2026 | $81.03 | $97.78 |
| 30 Oct 2026 | $79.72 | $104.81 |
| 6 Nov 2026 | $79.40 | $96.84 |
| 12 Nov 2026 | $82.96 | $91.68 |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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