u/investorinvestor

ZTS trades at 13x P/E while delivering 9% EPS growth, and management increased debt by 50% to fund buybacks. The combination of low valuation, positive EPS growth, and aggressive management buybacks (signaling intrinsic value > current price) creates a contrarian value opportunity. Buy ZTS as a value play on temporary pet sector headwinds, with management providing a strong signal through leveraged buybacks. Continued contraction in the pet segment; macro slowdown in animal health spending; rising debt service costs if rates stay high.

Management plans 12% annual share count reduction and drastic cost cuts; normalized EPS could grow 50%. If EPS grows and sentiment improves, PE could double from ~8x to 16x, creating a 3x price move; options now cheap. Long PYPL (stock or cheap calls) to capture potential turnaround re-rating. Turnaround fails, revenue declines, competition (e.g., Block, Apple Pay), macro headwinds, or buyback not executed.