Stock Analysis on Net

Zoetis Inc. (NYSE:ZTS)

Enterprise Value to FCFF (EV/FCFF) 

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

Zoetis Inc., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income attributable to Zoetis Inc. 2,344 2,114 2,037 1,638 1,500
Net loss attributable to noncontrolling interests (4) (3) (3) (2)
Net noncash charges 525 500 522 575 446
Other changes in assets and liabilities, net of acquisitions and divestitures (512) (699) (343) (85) (151)
Net cash provided by operating activities 2,353 1,912 2,213 2,126 1,795
Cash paid during the period for interest, net of capitalized interest, net of tax1 235 192 207 211 206
Capitalized interest expense, net of tax2 22 17 16 14 11
Capital expenditures (732) (586) (477) (453) (460)
Free cash flow to the firm (FCFF) 1,878 1,535 1,959 1,898 1,552

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Zoetis Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Zoetis Inc. FCFF decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Interest Paid, Net of Tax

Zoetis Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR1 20.30% 20.50% 18.20% 18.00% 16.70%
Interest Paid, Net of Tax
Cash paid during the period for interest, net of capitalized interest, before tax 295 242 253 257 247
Less: Cash paid during the period for interest, net of capitalized interest, tax2 60 50 46 46 41
Cash paid during the period for interest, net of capitalized interest, net of tax 235 192 207 211 206
Interest Costs Capitalized, Net of Tax
Capitalized interest expense, before tax 27 21 20 17 13
Less: Capitalized interest expense, tax3 5 4 4 3 2
Capitalized interest expense, net of tax 22 17 16 14 11

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 2023 Calculation
Cash paid during the period for interest, net of capitalized interest, tax = Cash paid during the period for interest, net of capitalized interest × EITR
= 295 × 20.30% = 60

3 2023 Calculation
Capitalized interest expense, tax = Capitalized interest expense × EITR
= 27 × 20.30% = 5


Enterprise Value to FCFF Ratio, Current

Zoetis Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 82,131
Free cash flow to the firm (FCFF) 1,878
Valuation Ratio
EV/FCFF 43.74
Benchmarks
EV/FCFF, Competitors1
AbbVie Inc. 13.50
Amgen Inc. 23.14
Bristol-Myers Squibb Co. 8.06
Danaher Corp. 38.03
Eli Lilly & Co. 707.90
Gilead Sciences Inc. 12.20
Johnson & Johnson 18.12
Merck & Co. Inc. 38.02
Pfizer Inc. 33.46
Regeneron Pharmaceuticals Inc. 25.45
Thermo Fisher Scientific Inc. 29.96
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences 27.62
EV/FCFF, Industry
Health Care 23.82

Based on: 10-K (reporting date: 2023-12-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Zoetis Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 88,543 83,977 96,445 82,629 73,350
Free cash flow to the firm (FCFF)2 1,878 1,535 1,959 1,898 1,552
Valuation Ratio
EV/FCFF3 47.16 54.71 49.22 43.54 47.27
Benchmarks
EV/FCFF, Competitors4
AbbVie Inc. 14.89 12.15 13.18 13.95 11.60
Amgen Inc. 22.22 16.01 15.82 14.51 16.05
Bristol-Myers Squibb Co. 9.14 13.87 10.52 11.63 23.39
Danaher Corp. 36.34 25.74 28.25 30.66 37.11
Eli Lilly & Co. 655.33 59.14 38.37 39.01 36.26
Gilead Sciences Inc. 13.41 13.58 8.42 13.60 9.78
Johnson & Johnson 19.30 23.80 21.25 20.75 19.31
Merck & Co. Inc. 37.84 19.09 23.27 34.12 20.46
Pfizer Inc. 32.24 9.15 8.40 21.74 19.44
Regeneron Pharmaceuticals Inc. 23.99 17.96 9.81 25.74 19.54
Thermo Fisher Scientific Inc. 28.85 31.61 33.14 26.14 28.88
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences 27.50 18.37 16.44 20.25 19.59
EV/FCFF, Industry
Health Care 23.93 17.99 17.44 18.06 18.43

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 See details »

3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 88,543 ÷ 1,878 = 47.16

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Zoetis Inc. EV/FCFF ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.