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 may be overlooking the opportunity from a key product launch that could become one of the biggest in animal health history. A recent survey conducted by Piper Sandler shows most of the 101 veterinarians it polled expect the prices they charge and the volume of patients they see to mostly hold up in 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 would be prioritized in household budgets. “While this survey did show some modestly weakening macro data, we think the sell-off over the last month likely reflected that,” said analyst David Westenberg. While Piper Sandler “modestly” trimmed earnings estimates for 2024 for animal health-care companies Zoetis, Idexx Laboratories and Elanco Animal Health , Westenberg said Zoetis’ products performed well in the survey. “Librela looks like it’s going to be widely used in the first year, and we think Zoetis will actually gain share in parasiticides even with new major competition,” Westenberg said. Librela is a monoclonal antibody that treats the pain associated with osteoarthritis in canines. It is the first drug of its kind in the U.S. market, and about a quarter of dogs will be diagnosed with the condition at some point in their lives, according to the U.S. Food and Drug Administration. Westenberg’s survey indicated more than three-fourths of the vets polled were planning to order it in its first year of launch. Zoetis already sells Solensia, a version of the drug for cats that was approved last year. Solensia rang up $30 million in sales last year, but the opportunity for Librela is even bigger, according to the analyst. ZTS YTD mountain Even with the recent pullback in Zoetis stock, shares are up more than 18% year to date. In parasiticides, Zoetis sells Simparica Trio, a chewable medication dogs can take once a month to prevent heartworm, ticks and fleas, as well as roundworms and hookworms. According to FactSet, 87% of analysts rate Zoetis a buy and carry an average price target of $223, which implies nearly 30% upside from current levels. If there is one thing clouding the picture for pet health care, according to Piper Sandler, it is continued concerns about the labor market and whether practices will be able to find enough vet technicians and veterinarians to fully staff up. Piper Sandler said 58% of the vets it surveyed said their clinics were understaffed, which means the situation has gotten worse since the firm’s last poll in the first quarter. Heading into 2024, Westenberg expects the overhang of the pandemic pet boom to finally fade on vet visits. This could be helpful over a longer 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 year. FactSet said the majority of analysts, some 55%, rate the stock a hold. In the Piper Sandler survey, few vets said they would pick the company’s Credelio Quattro as their primary parasiticide when it is released. While that observation isn’t encouraging for Elanco, it further supports the strength of Zoetis’ business. Quattro is expected to be approved in the first half of next year, Westenberg said.