UPDATE: Bank Of America Reiterates On Zoetis On Enhanced Clarity On Long-Term Prospects

In a report published Wednesday, Bank of America analyst Robert M. Willoughby reiterated a Buy rating on

, and raised the price target from $49.00 to $51.00. In the report, Bank of America noted, “ZTS' investor day answered several burning questions, offering clarity on profit margin drivers, its capital deployment strategy, and some of its longer term goals. Initial 2015 guidance confirmed its organic revenue growth trajectory (+6.5-8.5%) will continue to track ahead of the market, but adj. EPS ($1.61-$1.68) fell below our estimate ($1.74) and consensus ($1.72), primarily attributable to FX (-$0.08). (The view excludes acquisition contributions, share repurchases, or incremental R&D returns, all of which are likely). Targets for 2016/2017 call for 5-7% topline growth and 11-16% net income growth, largely in line with our expectations, suggesting meaningful profit margin expansion. We are lowering our 2015 EPS to $1.68 (from $1.74), reflecting FX headwinds offset by the Abbott deal and the execution of its $500 million share repurchase program. We are raising our PO to $51 (from $49) on heightened conviction in its longer term prospects.” Zoetis closed on Tuesday at $44.19.