Citigroup Offers Thoughts On Zoetis Ahead Of Investor Day

In a report published Tuesday, Citigroup analyst Liav Abraham reiterated a Buy rating and $49.00 price target on

. In the report, Citigroup noted, “Following today's announcement of a pending ACT/AGN deal, coupled with Pershing Square's announcement of an 8.3% stake in the company last week, we expect strategic options to remain a topic of interest heading into ZTS' investor day tomorrow. Strategic options that could be explored include (i) a potential restructuring program, including cost reduction, in order to increase shareholder value; or (ii) a potential sale of the company. We believe that a reduction of operating expenses is likely limited to c.20%, and as such, ZTS likely remains a more likely takeover candidate, particularly for those looking to enter or establish critical mass in the animal health industry and who benefit from low tax rates and can therefore capture the potential tax synergies from an acquisition of the company.” Zoetis closed on Monday at $44.23.