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Cabot (CBT) Shares Hit 52-week High: What's Driving It?

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Cabot Corporation (CBT - Free Report) scaled a fresh 52-week high of $78.62 on May 31, before closing the session at $75.61.

The company, sporting a Zacks Rank #1 (Strong Buy), has a market cap of around $4.4 billion.

Shares of Cabot have gained 18.4% in the past year against a 4.4% decline of the industry.

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What’s Driving CBT?

Cabot is benefiting from a recovery in demand from the pandemic-led slowdown, its disciplined execution of operations and targeted growth initiatives. The company is also well placed to benefit from its strategic acquisitions.

The acquisition of the Tokai Carbon Black Plant is expected to boost growth of the company’s Battery Materials product line. The buyout is in sync with Cabot’s strategy of executing growth opportunities in high-growth and high-performance markets such as battery materials. The investment will enable it to meet the demand for lithium-ion batteries and run its operations responsibly to reduce the environmental impact.

The company is also benefiting from strong underlying demand across its businesses. Higher volumes and favorable pricing are driving results in its Reinforcement Materials segment. The company expects volumes to increase sequentially in the fiscal third quarter, driven by growth in Battery Materials applications.

Cabot also remains committed to boosting shareholders’ value. It returned $36 million to shareholders through dividends and share repurchases in second-quarter fiscal 2022. The company also ended second-quarter fiscal 2022 with strong liquidity of $1.2 billion, which appears to be adequate to meet its short-term debt obligations.

Earnings estimates for Cabot have also been going up in the past two months. The Zacks Consensus Estimate for fiscal 2022 has increased around 5.2%. The consensus estimate for third-quarter fiscal 2022 has also been revised 3.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Cabot Corporation Price and Consensus

 

Cabot Corporation Price and Consensus

Cabot Corporation price-consensus-chart | Cabot Corporation Quote

 

Stocks to Consider

Some other top-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Nutrien Ltd. (NTR - Free Report) , The Chemours Company (CC - Free Report) .

Allegheny has a projected earnings growth rate of 871.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 27.3% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 12.5% in a year and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien has a projected earnings growth rate of 159.7% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 25.8% upward in the past 60 days.

Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 54.3% in a year. The company flaunts a Zacks Rank #1.

Chemours has a projected earnings growth rate of 30.4% for the current year. The Zacks Consensus Estimate for CC’s current-year earnings has been revised 15.7% upward in the past 60 days.

Chemours’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 28.7%. CC has gained 16.1% in a year. The company flaunts a Zacks Rank #1.

 


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