Cabot Corporation (CBT - Free Report) is set to increase global prices for all activated carbon products. The hike will be put into effect for all shipments made on or after Oct 1, or as contracts permit.
The price hikes will range from 5-10%, depending on the specific activated carbon product and region. The company is raising prices in response to rising raw material costs and currency fluctuations. Cabot is also exposed to higher freight costs as well as environmental compliance control costs at its manufacturing facilities.
Notably, the price increase action will enable the company to support investment in product and application development. Additionally, it will ensure that Cabot will be a long-term and reliable supplier of high-quality activated carbon products and services.
In a year’s time, shares of Cabot have outperformed the industry it belongs to. While the stock has gained around 16.8%, the industry saw decline of 1.7%.
Cabot, during its fiscal third-quarter call, said that it expects the Reinforcement Materials segment to continue its strong performance in the fourth quarter on solid operational and commercial execution. For the Performance Chemicals segment, it expects to maintain margins while driving volume growth in specialty Carbons and Formulations.
The Reinforcement Materials segment is benefiting from strong commercial execution that is driving volumes and margin growth. The Performance Chemicals unit is also gaining from the favorable impact of price increase actions. Notably, in the third quarter, sales at both the segments rose year over year.
The company is taking appropriate pricing actions to offset feedstock cost inflation. It is also committed toward driving product mix at Performance Chemicals through the launch of products and applications.
Cabot Corporation Price and Consensus
Zacks Rank & Stocks to Consider
Cabot is a Zacks Rank #3 (Hold) stock.
Some better-ranked companies in the basic materials space are Huntsman Corporation (HUN - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 4.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #2 (Buy). The company’s shares have rallied 54.7% in the past year.
Air Products has an expected long-term earnings growth rate of 16.2% and a Zacks Rank #2. Its shares have risen 11.6% in a year’s time.
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