UPDATE: Piper Jaffray Initiates Zoetis at Overweight on Growth Outlook

Piper Jaffray initiated coverage on Zoetis (NYSE: ZTS) with an Overweight rating and a $40.00 price target.Piper Jaffray analyst Kevin K. Ellich noted, "We have a positive outlook on the animal health industry and believe further upside in ZTS will be driven by margin expansion, capital allocation, and strategic acquisitions. We believe our target valuation of 24.5x FY14E EPS is justified based on: 1) mid-to-high single digit base growth without the risk of government reimbursement; 2) the stable and mature nature of the industry with solid demand and growth opportunities; and 3) scarcity value for a high quality, large-cap animal health stock. While last year's harsh drought could create a slight headwind during 1H13, it also makes comps easier during 2H13."Zoetis closed at $33.82 on Tuesday.