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William Blair Ups Zoetis To Outperform, Says Guidance Is Conservative

Zoetis (ZTS) is rising Thursday, helped by a bullish note from William Blair.

Analyst John Kreger upgraded the stock to Outperform applauding the company’s upbeat second-quarter earnings. He writes that much of the quarter’s strength can continue in the second half of the year, giving him confidence that the company’s forecasts leave room for upside.

More detail on his estimates:

We are increasing our 2015 EPS target by 3 cents, to $1.67 (up 6%), and our 2016 target by a penny, to $1.88 (up 14%). Given the stronger outlook and the stock’s muted response, we are increasing our rating to Outperform. While we acknowledge that the M&A premium, which has boosted valuation in recent months, may be starting to dissipate, we believe the improving fundamentals and the...