Jefferies downgraded Zoetis (NYSE: ZTS) from Buy to Hold and cut its price target from $103 to $83. Shares fell in pre-market trading.
The firm cited concerns about the animal health company's future pricing power, a key driver of earnings growth. Pricing accounted for about 64% of Zoetis' earnings-per-share growth from 2022 to 2025.
Jefferies said muted vet visits, waning pet-owner sentiment and increasing competition put further price gains at risk.
The firm projects Zoetis' earnings per share could decline 2% in 2027. That forecast is approximately 8% below Wall Street consensus.