Cabot Corporation’s CBT shares have popped around 23% over the past three months. The rally has been fueled by CBT's strong earnings performance, upward revisions to earnings guidance and robust performance across its business segments.
We are positive about the company’s prospects and believe that the time is right for you to add the stock to your portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make CBT stock a compelling choice for investors right now.
CBT Stock Outperforms Industry
Cabot has outperformed the rest of the Chemical - Diversified industry it belongs to over the past year. The company’s shares have shot up 61.4% compared with a 4.6% rise of its industry.
Image Source: Zacks Investment Research
CBT’s Earnings Estimates Northbound
Earnings estimates for CBT have been going up over the past 60 days. The Zacks Consensus Estimate for fiscal 2024 has increased by 4.3%. The consensus estimate for fiscal 2025 has also been revised 3.9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
CBT’s Impressive Earnings Surprise History
Cabot has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 8.6%, on average.
Cabot’s Stock Strong Growth Prospects
The Zacks Consensus Estimate for CBT's fiscal 2024 earnings is pegged at $7.07, suggesting a 31.4% increase from the previous year’s tally. Earnings are projected to increase 10.6% in fiscal 2025.
Strong Demand & Improved Mix Aid CBT Stock
CBT’s Performance Chemicals division is seeing strong growth driven by higher volumes and a favorable product mix, particularly in specialized carbons and fumed metal oxides. This growth is being supported by robust demand across the automotive, infrastructure and semiconductor markets.
The Reinforcement Materials segment is also benefiting from higher volumes in Europe and Asia Pacific, improved pricing and a stronger product mix in 2024 customer agreements. CBT’s strong cash generation also facilitates a balanced capital allocation approach that emphasizes strategic investments, long-term earnings growth and shareholder returns while preserving a solid investment-grade balance sheet.
The company is optimistic about its fiscal fourth-quarter performance. It raised its fiscal 2024 adjusted earnings per share guidance to the range of $7.00-$7.10, calling for an increase of 30 cents at the midpoint. This revision is based on anticipated strong results from the Performance Chemicals segment, driven by higher demand and an enhanced product mix, coupled with continued strength in the Reinforcement Materials unit.
Cabot Corporation Stock Price and Consensus
Cabot Corporation price-consensus-chart | Cabot Corporation Quote
CBT’s Zacks Rank & Other Key Picks
CBT currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Basic Materials space are IAMGOLD Corporation IAG, CF Industries Holdings, Inc. CF and Axalta Coating Systems Ltd. AXTA. While IAMGOLD sports a Zacks Rank #1 (Strong Buy), CF Industries and Axalta Coating carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IAMGOLD’s current-year earnings has increased by 45.4% in the past 60 days. IAG beat the consensus estimate in each of the last four quarters with the average surprise being 200%. Its shares have shot up roughly 157% in the past year.
The consensus estimates for CF Industries’ current-year earnings has increased by 21.2% in the past 60 days. CF's shares have gained roughly 5% in the past year.
The Zacks Consensus Estimate for Axalta Coating’s current year earnings is pegged at $2.07, indicating a rise of 31.9% from year-ago levels. The Zacks Consensus Estimate for AXTA’s current year earnings has increased 2.5% in the past 60 days. The stock has gained around 32% in the past year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
