UPDATE: Goldman Sachs Initiates Zoetis at Neutral; Upside Limited From Current Valuation

Goldman Sachs initiated coverage on Zoetis

with an Overweight rating and a $33.00 price target. Goldman Sachs analyst Jami Rubin noted, "ZTS is the largest and only independently traded animal health company, with revenues of over $4.0 bn. We anticipate powerful macro trends in livestock and companion animals to provide tailwinds for sustained top line growth in the 5-7% range, with margin expansion yielding earnings growth in the upper teens through 2014, and low double-digit/high single-digit EPS growth thereafter. As a pure play animal health business, ZTS represents a scarce asset within our healthcare universe; however, as the stock currently trades at 23.5x 2013E we see limited upside from here." Zoetis closed at $33.82 on Tuesday.