Zoetis shares have fallen about 10% since their recent peak in late July amid concerns that a weakening economy will prompt consumers to spend less on their pets. But investors could also be overlooking the chance from a key product launch that could develop into one of the largest in animal health history. A recent survey conducted by Piper Sandler shows most of the 101 veterinarians it polled expect the costs they charge and the quantity of patients they see to mostly delay within the months ahead. Pets have increasingly been elevated to the status of furry children , so it stands to reason that spending on their health-care needs could be prioritized in household budgets. “While this survey did show some modestly weakening macro data, we predict the sell-off during the last month likely reflected that,” said analyst David Westenberg. While Piper Sandler “modestly” trimmed earnings estimates for 2024 for animal health-care firms Zoetis, Idexx Laboratories and Elanco Animal Health , Westenberg said Zoetis’ products performed well within the survey. “Librela looks like it’ll be widely utilized in the primary yr, and we predict Zoetis will actually gain share in parasiticides even with latest major competition,” Westenberg said. Librela is a monoclonal antibody that treats the pain related to osteoarthritis in canines. It’s the primary drug of its kind within the U.S. market, and a few quarter of dogs will likely be diagnosed with the condition in some unspecified time in the future of their lives, based on the U.S. Food and Drug Administration. Westenberg’s survey indicated greater than three-fourths of the vets polled were planning to order it in its first yr of launch. Zoetis already sells Solensia, a version of the drug for cats that was approved last yr. Solensia rang up $30 million in sales last yr, but the chance for Librela is even greater, based on the analyst. ZTS YTD mountain Even with the recent pullback in Zoetis stock, shares are up greater than 18% yr up to now. In parasiticides, Zoetis sells Simparica Trio, a chewable medication dogs can take once a month to stop heartworm, ticks and fleas, in addition to roundworms and hookworms. In line with FactSet, 87% of analysts rate Zoetis a buy and carry a mean price goal of $223, which suggests nearly 30% upside from current levels. If there’s one thing clouding the image for pet health care, based on Piper Sandler, it is sustained concerns concerning the labor market and whether practices will have the opportunity to search out enough vet technicians and veterinarians to totally staff up. Piper Sandler said 58% of the vets it surveyed said their clinics were understaffed, which implies the situation has gotten worse because the firm’s last poll in the primary quarter. Heading into 2024, Westenberg expects the overhang of the pandemic pet boom to finally fade on vet visits. This could be helpful over an extended time horizon to Idexx, which makes diagnostic tests, because its comparisons to prior periods will improve, he said. As for Elanco, its stock is down 20% this yr. FactSet said the bulk of analysts, some 55%, rate the stock a hold. Within the Piper Sandler survey, few vets said they’d pick the corporate’s Credelio Quattro as their primary parasiticide when it’s released. While that commentary is not encouraging for Elanco, it further supports the strength of Zoetis’ business. Quattro is predicted to be approved in the primary half of next yr, Westenberg said.