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Here's Why You Should Add Cabot Stock to Your Portfolio Now
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Key Takeaways
Cabot's battery materials expansion and improved earnings outlook strengthen its long-term growth prospects.
CBT targets $40 million in battery materials EBITDA in fiscal 2026, backed by rising global battery demand.
Cabot generated $278 million in nine-month operating cash flow and targets $30 million in cost savings.
Cabot Corporation (CBT - Free Report) is benefiting from capital-efficient investments in capacity expansion to match battery materials demand growth. Upbeat earnings outlook also boosts investors’ confidence. Disciplined cost control and continuous cash generation also position CBT for long-term growth.
We are positive about CBT’s prospects and believe that the time is right for you to add the stock to the portfolio, as it looks promising and is poised to carry the momentum ahead.
Let's see what makes CBT stock an attractive investment option at the moment.
An Outperformer
CBT’s shares have gained 7.7% compared with the industry’s rise of 0.2% in the past year.
Image Source: Zacks Investment Research
CBT’s Positive Earnings Surprise History
CBT has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 4.6%, on average.
CBT’s Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12-months for CBT is 20.29%, above the industry’s level of 7.62%.
Image Source: Zacks Investment Research
Upbeat Outlook
For fiscal 2026, Cabot revised its adjusted earnings guidance to $6.15-$6.45 per share from the previous range of $6-$6.5. The company expects its full-year fiscal 2026 operating tax rate to be in the range of 28-30%. Cabot also reaffirmed its expectation of approximately $40 million of EBITDA from its battery materials product line for fiscal 2026. The company is expanding global conductive additive capacity through targeted investments in the United States and China to support expected growth in global battery demand and broaden its participation with leading battery manufacturers.
Battery Materials Growth and Capacity Expansion
Cabot’s Battery Materials business is supported by rising demand for electric vehicles and battery energy storage systems. The company expects global battery demand to more than double by 2030 and reaffirmed its fiscal 2026 EBITDA target of approximately $40 million for Battery Materials. Acquisitions in China, including NSCC Carbon, carbon nanotube assets and Shenzhen Sanshun Nano New Materials, are strengthening its position.
Additionally, Cabot’s has also planned $125 million U.S. expansion across two existing manufacturing sites. It is expected to bring new capacity online by 2028. Its capital efficient capacity additions will align with rising customer demand, positioning the company for long-term battery market growth.
Strong Cash Generation and Cost Cutting Support Returns
Robust cash generation and disciplined cost management are strengthening its financial flexibility and ability to support shareholder returns. The company generated $75 million in operating cash flow in the third quarter of fiscal 2026 and $278 million in the first nine months of the fiscal year. Its fiscal 2026 cost plan targets approximately $30 million in savings, supported by restructuring initiatives, including the cessation of production at Campana and planned closures of units at Botlek in fiscal 2027. These measures are expected to support profitability, while investments in sustainable manufacturing, including circular reinforcing carbons produced at its Ville Platte, LA, facility, provide additional opportunities.
CBT’s Zacks Rank & Other Key Picks
CBT currently sports a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Basic Materials space are Aperam S.A. (APEMY - Free Report) , Reliance, Inc. (RS - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report) .
The Zacks Consensus Estimate for APEMY’s current fiscal-year earnings is pinned at $3.30 per share. APEMY’sshares have gained 15% over the past year.
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.23 per share, indicating a 62.9% year-over-year increase. RS’shares have gained 46.1% over the past year.
The Zacks Consensus Estimate for AXTA’s fiscal 2026 earnings is pegged at $2.63 per share, indicating a rise of 5.62% year over year. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 6.45%.
View the Zacks #1 Rank List
Image: Bigstock
Here's Why You Should Add Cabot Stock to Your Portfolio Now
Key Takeaways
Cabot Corporation (CBT - Free Report) is benefiting from capital-efficient investments in capacity expansion to match battery materials demand growth. Upbeat earnings outlook also boosts investors’ confidence. Disciplined cost control and continuous cash generation also position CBT for long-term growth.
We are positive about CBT’s prospects and believe that the time is right for you to add the stock to the portfolio, as it looks promising and is poised to carry the momentum ahead.
Let's see what makes CBT stock an attractive investment option at the moment.
An Outperformer
CBT’s shares have gained 7.7% compared with the industry’s rise of 0.2% in the past year.
Image Source: Zacks Investment Research
CBT’s Positive Earnings Surprise History
CBT has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 4.6%, on average.
CBT’s Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12-months for CBT is 20.29%, above the industry’s level of 7.62%.
Image Source: Zacks Investment Research
Upbeat Outlook
For fiscal 2026, Cabot revised its adjusted earnings guidance to $6.15-$6.45 per share from the previous range of $6-$6.5. The company expects its full-year fiscal 2026 operating tax rate to be in the range of 28-30%. Cabot also reaffirmed its expectation of approximately $40 million of EBITDA from its battery materials product line for fiscal 2026. The company is expanding global conductive additive capacity through targeted investments in the United States and China to support expected growth in global battery demand and broaden its participation with leading battery manufacturers.
Battery Materials Growth and Capacity Expansion
Cabot’s Battery Materials business is supported by rising demand for electric vehicles and battery energy storage systems. The company expects global battery demand to more than double by 2030 and reaffirmed its fiscal 2026 EBITDA target of approximately $40 million for Battery Materials. Acquisitions in China, including NSCC Carbon, carbon nanotube assets and Shenzhen Sanshun Nano New Materials, are strengthening its position.
Additionally, Cabot’s has also planned $125 million U.S. expansion across two existing manufacturing sites. It is expected to bring new capacity online by 2028. Its capital efficient capacity additions will align with rising customer demand, positioning the company for long-term battery market growth.
Strong Cash Generation and Cost Cutting Support Returns
Robust cash generation and disciplined cost management are strengthening its financial flexibility and ability to support shareholder returns. The company generated $75 million in operating cash flow in the third quarter of fiscal 2026 and $278 million in the first nine months of the fiscal year. Its fiscal 2026 cost plan targets approximately $30 million in savings, supported by restructuring initiatives, including the cessation of production at Campana and planned closures of units at Botlek in fiscal 2027. These measures are expected to support profitability, while investments in sustainable manufacturing, including circular reinforcing carbons produced at its Ville Platte, LA, facility, provide additional opportunities.
CBT’s Zacks Rank & Other Key Picks
CBT currently sports a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Basic Materials space are Aperam S.A. (APEMY - Free Report) , Reliance, Inc. (RS - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report) .
APEMY sports a Zacks Rank #1 (Strong Buy) while RS and AXTA carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for APEMY’s current fiscal-year earnings is pinned at $3.30 per share. APEMY’sshares have gained 15% over the past year.
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.23 per share, indicating a 62.9% year-over-year increase. RS’shares have gained 46.1% over the past year.
The Zacks Consensus Estimate for AXTA’s fiscal 2026 earnings is pegged at $2.63 per share, indicating a rise of 5.62% year over year. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 6.45%.