ZTS enters the week after the most bruising single session it has seen in years. The stock closed at $82.83 on May 8, down 27% on the week and 29% over the past month — a collapse that followed Q1 results reported on May 7 that sent shares tumbling 25.5% in a single day.
The magnitude of the earnings reaction is the defining fact. That 25.5% single-day drop dwarfs the prior print, when the stock barely moved (-0.06%) before recovering 2.5% over the following week. Whatever disappointed the market this time — guidance, pricing dynamics in the companion animal segment, or broader veterinary-clinic traffic trends — it landed hard enough to strip roughly a quarter of the company's value in hours, bringing ZTS to levels not seen in several years. The RSI-14 has collapsed to 13.66, one of the most technically oversold readings in the pharma universe right now.
The positioning picture before and through the crash tells an interesting story. Short interest had already been declining sharply — it peaked near 4% of the float in late March and early April, and by May 7 had fallen to roughly 3% of free float as bears covered into the slide. That ongoing reduction suggests the week's price damage was driven more by long-side liquidation than by a surge of fresh shorting. Borrow conditions remain relaxed: cost to borrow is 0.46% annualised, barely changed on the week, and availability remains ample. There is no sign of squeeze dynamics or a dislocated lending market — shorts who held through the drop are comfortably positioned.
Options markets had been flashing a warning. The put/call ratio climbed to 0.67 on May 8, running well above its 20-day average of 0.48 and roughly 1.6 standard deviations elevated — the highest defensive skew in weeks. The shift started around April 27-28, when the PCR broke above 0.58 after spending most of April below 0.40. That rotation toward puts preceded the earnings event and reflected genuine hedging demand, even if the scale of the actual move exceeded what options pricing implied.
The Street is now scrambling to reset. JP Morgan — which had carried a $190 target as recently as last month — slashed it to $130 while keeping an Overweight rating, a target cut of one-third in a single move. UBS lowered its target to $99 under a Neutral, down from $130 earlier in the week. The mean analyst price target now stands near $136, which implies more than 60% upside from Friday's close. That gap deserves caution: analysts are still in the process of resetting models, and targets could move further in the coming days. What is clear is the direction — the Street is revising down, not up, even where ratings are held. Citigroup had initiated with a Buy and a $145 target in mid-April; that call has aged poorly in a matter of weeks. Factor scores offer a mixed read on the longer-term investment case: the analyst recommendation differential ranks in the 97th percentile (meaning consensus is still relatively constructive compared to history), and the dividend score also ranks at 97. But the stock's forward yield of 2.67% will attract less attention than the question of whether earnings estimates need a further leg down.
Institutional ownership is broadly passive-heavy: Vanguard holds 11.4% and BlackRock 8.9%, with State Street adding 4.7%. Wellington Management disclosed adding 2.85 million shares as recently as February, but that was before the earnings disaster. Whether active managers trim following the Q1 miss will be visible in the next filing cycle. Insider activity is unremarkable — the only recent transactions are small routine award-and-sell sequences from EVPs, with no open-market buying in the 90-day window, and no signal of conviction from management at these depressed prices.
The next scheduled event is a Q1 2026 Earnings Call on May 20 — confirming this week's release was the print itself, and that the analyst community will have a formal opportunity to press management on the outlook in less than two weeks. What to watch is whether guidance commentary on companion animal demand and pricing holds up under analyst questioning, and whether the JP Morgan and UBS target revisions mark the floor for Street estimates or the beginning of a further downward re-rating.
See the live data behind this article on ORTEX.
Open ZTS on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
