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Cabot (CBT) Stock Up 38% in 6 Months: What's Driving It?
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Cabot Corporation’s (CBT - Free Report) shares have rallied 38.3% over the past six months. The chemical maker, sporting a Zacks Rank #1 (Strong Buy), has also outperformed its industry’s rise of 26.2% over the same time frame. Moreover, it has topped the S&P 500’s 17.7% rise over the same period.
Let’s delve deeper into the factors behind the stock’s price appreciation.
What’s Favoring CBT?
Strong earnings performance in the fiscal first quarter and upbeat prospects driven by demand recovery have contributed to the rally in Cabot's shares. Its adjusted earnings per share of $1.18 for the fiscal first quarter topped the Zacks Consensus Estimate of 87 cents. Net sales rose around 3% year over year to $746 million in the quarter and also surpassed the Zacks Consensus Estimate of $691.6 million.
The company benefited from strong volumes and unit margins in its Reinforcement Materials segment in the quarter. Its Performance Chemicals segment also gained from higher volumes and improved product mix in specialty carbons and compounds product lines on the back of higher sales in automotive applications.
Cabot sees conditions to remain favorable over the near term. It projects strength in demand in the fiscal second quarter. The company also expects Reinforcement Materials volumes to remain strong in the fiscal second quarter.
The company is expected to benefit from a recovery in demand from its automotive and tire customers from the pandemic-led slowdown, its disciplined execution of operations and targeted growth initiatives. It saw strong volumes in the tire and automotive markets in the first quarter on the back of continued global recovery.
Moreover, Cabot should benefit from the acquisition of Shenzhen Sanshun Nano New Materials. The acquisition significantly bolsters the market position and formulation capabilities of Cabot in the high-growth batteries market, especially in China. The buyout is also expected to create opportunities to expand Cabot’s position in the rapidly growing energy storage market.
Earnings estimates for Cabot have also been going up over the past two months. The Zacks Consensus Estimate for fiscal 2021 has increased around 19.5% while the same for fiscal 2022 has gone up 7.9%. The favorable estimate revisions instill investor confidence in the stock.
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , Fortescue Metals Group Limited (FSUGY - Free Report) and United States Steel Corporation (X - Free Report) .
Nucor has a projected earnings growth rate of 135.3% for the current year. The company’s shares have surged around 123% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have shot up around 148% in a year. It currently sports a Zacks Rank #1.
U.S. Steel has an expected earnings growth rate of 201.1% for the current year. The company’s shares have surged around 326% in the past year. It currently carries a Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
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Cabot (CBT) Stock Up 38% in 6 Months: What's Driving It?
Cabot Corporation’s (CBT - Free Report) shares have rallied 38.3% over the past six months. The chemical maker, sporting a Zacks Rank #1 (Strong Buy), has also outperformed its industry’s rise of 26.2% over the same time frame. Moreover, it has topped the S&P 500’s 17.7% rise over the same period.
Let’s delve deeper into the factors behind the stock’s price appreciation.
What’s Favoring CBT?
Strong earnings performance in the fiscal first quarter and upbeat prospects driven by demand recovery have contributed to the rally in Cabot's shares. Its adjusted earnings per share of $1.18 for the fiscal first quarter topped the Zacks Consensus Estimate of 87 cents. Net sales rose around 3% year over year to $746 million in the quarter and also surpassed the Zacks Consensus Estimate of $691.6 million.
The company benefited from strong volumes and unit margins in its Reinforcement Materials segment in the quarter. Its Performance Chemicals segment also gained from higher volumes and improved product mix in specialty carbons and compounds product lines on the back of higher sales in automotive applications.
Cabot sees conditions to remain favorable over the near term. It projects strength in demand in the fiscal second quarter. The company also expects Reinforcement Materials volumes to remain strong in the fiscal second quarter.
The company is expected to benefit from a recovery in demand from its automotive and tire customers from the pandemic-led slowdown, its disciplined execution of operations and targeted growth initiatives. It saw strong volumes in the tire and automotive markets in the first quarter on the back of continued global recovery.
Moreover, Cabot should benefit from the acquisition of Shenzhen Sanshun Nano New Materials. The acquisition significantly bolsters the market position and formulation capabilities of Cabot in the high-growth batteries market, especially in China. The buyout is also expected to create opportunities to expand Cabot’s position in the rapidly growing energy storage market.
Earnings estimates for Cabot have also been going up over the past two months. The Zacks Consensus Estimate for fiscal 2021 has increased around 19.5% while the same for fiscal 2022 has gone up 7.9%. The favorable estimate revisions instill investor confidence in the stock.
Cabot Corporation Price and Consensus
Cabot Corporation price-consensus-chart | Cabot Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , Fortescue Metals Group Limited (FSUGY - Free Report) and United States Steel Corporation (X - Free Report) .
Nucor has a projected earnings growth rate of 135.3% for the current year. The company’s shares have surged around 123% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have shot up around 148% in a year. It currently sports a Zacks Rank #1.
U.S. Steel has an expected earnings growth rate of 201.1% for the current year. The company’s shares have surged around 326% in the past year. It currently carries a Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>