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Cabot Corporation (CBT)
NYSE:CBT
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Cabot
(NYSE:CBT)
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Rating:71Outperform
Price Target:
$91.00
▲(20.88% Upside)
Cabot's overall stock score is driven by strong financial performance and attractive valuation. While the company faces challenges in revenue growth and certain segment volumes, its strategic acquisitions and cash flow generation are significant positives. Technical analysis presents mixed signals, but the stock's valuation remains compelling.
Positive Factors
Cash Flow Generation
Strong cash flow generation supports Cabot's ability to fund capital expenditures and return value to shareholders, enhancing financial stability.
Strategic Acquisitions
The acquisition is expected to be accretive within the first year, enhancing Cabot's market position and operational capacity in reinforcement materials.
Sustainability Leadership
Recognition for sustainability leadership strengthens Cabot's brand reputation and aligns with increasing market demand for sustainable practices.
Negative Factors
Revenue Growth Decline
A decline in revenue growth indicates potential challenges in market demand and competitive pressures, which could impact long-term profitability.
Reinforcement Materials Volume Decline
Decreased volumes in a key segment reflect weaker customer demand and macroeconomic challenges, potentially affecting future revenue streams.
Macroeconomic Challenges
Ongoing macroeconomic challenges, including tariffs, may continue to pressure demand and operational costs, affecting Cabot's growth prospects.
Cabot (CBT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.01B
Dividend Yield2.34%
Average Volume (3M)330.34K
Price to Earnings (P/E)9.9
Beta (1Y)0.89
Revenue Growth-3.61%
EPS Growth-9.70%
CountryUS
Employees4,151
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.90
Shares Outstanding53,203,625
10 Day Avg. Volume389,123
30 Day Avg. Volume330,342
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit5.37
Enterprise Value/Ebitda6.35
Forecast
1Y Price Target
$78.50Price Target Upside4.28% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Cabot Business Overview & Revenue Model
Company DescriptionCabot Corporation operates as a specialty chemicals and performance materials company. It operates through three segments: Reinforcement Materials, Performance Chemicals, and Purification Solutions. The company offers reinforcing carbons used in tires as a rubber reinforcing agent and performance additive, as well as in industrial products, such as hoses, belts, extruded profiles, and molded goods; and engineered elastomer composites. It also provides specialty carbons used in inks, coatings, plastics, adhesives, toners, batteries, and displays applications; masterbatch and conductive compound products for use in automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics industries; inkjet colorants used in the inkjet printing applications; fumed silica used in adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries, and pharmaceuticals; fumed alumina used in various products, including inkjet media, lighting, coatings, cosmetics, and polishing slurries; and aerogel, a hydrophobic, silica-based particle for use in various thermal insulation and specialty chemical applications. In addition, the company offers activated carbon products used for the purification of water, air, food and beverages, pharmaceuticals, and other liquids and gases; and activated carbon solutions for activated carbon injection in coal-fired utilities, mobile water filter units, and carbon reactivation services. The company sells its products through distributors and sales representatives in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Cabot Corporation was founded in 1882 and is headquartered in Boston, Massachusetts.
How the Company Makes MoneyCabot generates revenue primarily through the sale of its specialty chemicals and performance materials. The main revenue stream comes from its Reinforcement Materials segment, which sells carbon black products to tire manufacturers and other rubber product producers. Additionally, the Performance Chemicals segment contributes significantly to revenue through the sale of specialty chemicals used in a variety of applications, including coatings and plastics. Cabot also benefits from strategic partnerships with key players in various industries, enhancing its market reach and enabling it to provide tailored solutions that meet specific customer needs. Furthermore, the company invests in research and development to innovate new products and improve existing ones, which helps maintain its competitive edge and drive sales growth.
Cabot Earnings Call Summary
Earnings Call Date:Aug 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong cash flow generation, strategic acquisitions, and sustainability recognition as significant positives. However, these were tempered by challenges in Reinforcement Materials volumes and a slight decline in adjusted EPS. The overall sentiment reflects a balanced view with effective strategic positioning but facing external challenges.Q3-2025 Updates
Positive Updates
Strong Cash Flow Generation
Cabot Corporation generated $249 million of operating cash flow in the third quarter, which was used to fund capital expenditures and return $64 million to shareholders through share repurchases and dividends.
Strategic Acquisition Agreement
Cabot announced a definitive agreement to acquire Bridgestone's reinforcing carbons plant in Mexico for $70 million, expected to be accretive in the first year.
Sustainability Leadership Recognition
Cabot received a platinum rating from EcoVadis for the fifth consecutive year, placing it among the top 1% of companies in the manufacturing of basic chemicals.
Battery Materials Strategy Execution
Cabot increased contribution margin by 20% in its Battery Materials segment compared to the same period in fiscal year 2024.
Performance Chemicals Growth
Performance Chemicals segment EBIT increased by 4% year-over-year, driven by higher gross profit per ton despite lower volumes.
Negative Updates
Decline in Reinforcement Materials Volumes
Reinforcement Materials segment volumes were down 8% year-over-year, primarily due to lower customer demand and a weaker global macroeconomic environment.
Adjusted Earnings Per Share Decline
Adjusted earnings per share (EPS) for the third quarter declined 1% from $1.92 in the third quarter of fiscal 2024 to $1.90.
Challenges from Tariffs and Macroeconomic Conditions
The company faced challenges from tariffs and a soft global macroeconomic environment, impacting customer demand and contributing to lower volumes.
Company Guidance
In the third quarter of fiscal 2025, Cabot Corporation reported adjusted earnings per share of $1.90, slightly down by 1% compared to the same period in the previous year. The company generated $249 million in operating cash flow, which facilitated $64 million in shareholder returns through share repurchases and dividends. Performance Chemicals demonstrated a 4% increase in EBIT year-over-year, while Reinforcement Materials experienced a 6% decline. Global volumes decreased by 8% due to a challenging macroeconomic environment, yet the company achieved favorable outcomes through network optimization and cost management strategies. Capital expenditures for the quarter were $61 million, with expectations of $250 million to $275 million for the fiscal year. Cabot's acquisition of Bridgestone's reinforcing carbons plant in Mexico for $70 million is anticipated to be accretive within the first year. The company maintains a strong liquidity position at approximately $1.4 billion, with a net debt-to-EBITDA ratio of 1.3x. Looking ahead, Cabot reaffirmed its full-year adjusted EPS outlook at $7.15 to $7.50, anticipating a continuation of robust cash flow and balanced capital allocation strategies.Cabot Financial Statement Overview
Summary
Cabot demonstrates strong profitability with consistent margins and effective cash management. Despite challenges in revenue growth, the company maintains healthy leverage ratios and operational efficiency.Income Statement
Cabot demonstrates strong profitability with a consistent gross profit margin of around 24-25% over recent periods. The net profit margin has improved significantly to 11% in the TTM, indicating effective cost management and operational efficiency. Revenue growth, however, has been variable, with a decline in the past year, but recent TTM results show stabilization. The EBIT and EBITDA margins further reflect robust operational performance.75
Positive
Balance Sheet
The balance sheet indicates a moderate debt-to-equity ratio of 0.90 in the TTM, suggesting balanced leverage, though slightly higher compared to peers. The return on equity is strong at 30.35%, illustrating effective utilization of shareholder funds. The equity ratio at 37.71% shows a stable equity base, supporting financial stability.70
Positive
Cash Flow
Cabot's cash flow is solid with a strong operating cash flow to net income ratio of 1.40, reflecting good cash generation relative to earnings. Free cash flow growth has been inconsistent, but recent figures show positive movement, and the free cash flow to net income ratio of 0.66 indicates a healthy cash flow position.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.81B | 3.99B | 3.93B | 4.32B | 3.41B | 2.61B |
| Gross Profit | 960.00M | 960.00M | 839.00M | 885.00M | 799.00M | 500.00M |
| EBITDA | 812.00M | 764.00M | 673.00M | 705.00M | 593.00M | 306.00M |
| Net Income | 425.00M | 380.00M | 445.00M | 209.00M | 250.00M | -224.00M |
Balance Sheet | ||||||
| Total Assets | 3.84B | 3.74B | 3.60B | 3.52B | 3.31B | 2.78B |
| Cash, Cash Equivalents and Short-Term Investments | 239.00M | 223.00M | 238.00M | 206.00M | 168.00M | 151.00M |
| Total Debt | 1.22B | 1.14B | 1.28B | 1.44B | 1.16B | 1.11B |
| Total Liabilities | 2.15B | 2.15B | 2.20B | 2.49B | 2.22B | 1.97B |
| Stockholders Equity | 1.54B | 1.43B | 1.26B | 898.00M | 947.00M | 691.00M |
Cash Flow | ||||||
| Free Cash Flow | 348.00M | 451.00M | 351.00M | -111.00M | 62.00M | 177.00M |
| Operating Cash Flow | 650.00M | 692.00M | 595.00M | 100.00M | 257.00M | 377.00M |
| Investing Cash Flow | -328.00M | -235.00M | -214.00M | -118.00M | -186.00M | -288.00M |
| Financing Cash Flow | -279.00M | -415.00M | -403.00M | 145.00M | -60.00M | -132.00M |
Cabot Technical Analysis
Negative
75.28
Price Trends
77.88
Negative
76.62
Negative
80.18
Negative
Market Momentum
-0.91
Positive
41.25
Neutral
24.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CBT, the sentiment is Negative. The current price of 75.28 is below the 20-day moving average (MA) of 77.81, below the 50-day MA of 77.88, and below the 200-day MA of 80.18, indicating a bearish trend. The MACD of -0.91 indicates Positive momentum. The RSI at 41.25 is Neutral, neither overbought nor oversold. The STOCH value of 24.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CBT.
Cabot Risk Analysis
Cabot disclosed 21 risk factors in its most recent earnings report. Cabot reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cabot Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $3.92B | 10.66 | 4.44% | ― | -6.73% | ― | |
71 Outperform | $4.01B | 9.94 | 29.03% | 2.34% | -3.61% | -9.70% | |
70 Neutral | $2.93B | 24.81 | 5.01% | 3.31% | 3.28% | 1.69% | |
68 Neutral | $3.89B | 28.84 | 11.65% | 1.79% | 4.95% | 53.63% | |
63 Neutral | $3.21B | 51.58 | -0.51% | ― | 56.87% | ― | |
60 Neutral | $3.17B | 28.17 | 5.87% | 1.55% | -1.30% | -36.69% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
CBT
Cabot
75.60
-32.64
-30.16%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.