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Cabot (CBT) Shares Up 25% in 6 Months: What's Driving It?
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Cabot Corporation’s (CBT - Free Report) shares have gained 25.3% over the past six months. The company has also outperformed its industry’s rise of 1% over the same time frame. Moreover, it has topped the S&P 500’s roughly 1.9% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #3 (Hold) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Aiding CBT?
Solid fiscal first quarter results and upbeat outlook have contributed to the run-up in the company's shares. Cabot’s adjusted earnings of $1.29 per share for the first quarter of fiscal 2022 trounced the Zacks Consensus Estimate of $1.06. Net sales climbed around 30% year over year to $968 million and topped the Zacks Consensus Estimate of $815.2 million.
The company raised its adjusted earnings per share outlook for fiscal 2022 to the range of $5.50-$5.90 from the previous view of $5.20-$5.60. For the second quarter of fiscal 2022, it also expects demand improvement across all its key product lines and a boost in profitability.
Cabot is expected to gain 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 Shenzhen Sanshun Nano New Materials 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.
The buyout of the Tokai Carbon Black Plant is also expected to boost growth of the company’s Battery Materials product line. The Tokai site has a present annual capacity of 50,000 metric tons of carbon black and Cabot’s planned investment will add more steam to the capabilities of battery-grade production.
The Tokai Carbon acquisition 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 better meet the demand for lithium-ion batteries and run its operations responsibly such that they reduce the environmental impact.
The company is also on track with its long-term guidance to generate more than $1 billion during the next three years and expects a strong free cash flow to fund high-growth investments. It is also committed to returning capital to shareholders through dividends and share repurchases.
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 35.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 90% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 64.9% for the current year. ASIX's consensus estimate for current-year earnings has been revised 53% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 69% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 114.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 35.1% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.7%, on average. CMC has gained around 42% in a year.
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Cabot (CBT) Shares Up 25% in 6 Months: What's Driving It?
Cabot Corporation’s (CBT - Free Report) shares have gained 25.3% over the past six months. The company has also outperformed its industry’s rise of 1% over the same time frame. Moreover, it has topped the S&P 500’s roughly 1.9% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #3 (Hold) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Aiding CBT?
Solid fiscal first quarter results and upbeat outlook have contributed to the run-up in the company's shares. Cabot’s adjusted earnings of $1.29 per share for the first quarter of fiscal 2022 trounced the Zacks Consensus Estimate of $1.06. Net sales climbed around 30% year over year to $968 million and topped the Zacks Consensus Estimate of $815.2 million.
The company raised its adjusted earnings per share outlook for fiscal 2022 to the range of $5.50-$5.90 from the previous view of $5.20-$5.60. For the second quarter of fiscal 2022, it also expects demand improvement across all its key product lines and a boost in profitability.
Cabot is expected to gain 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 Shenzhen Sanshun Nano New Materials 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.
The buyout of the Tokai Carbon Black Plant is also expected to boost growth of the company’s Battery Materials product line. The Tokai site has a present annual capacity of 50,000 metric tons of carbon black and Cabot’s planned investment will add more steam to the capabilities of battery-grade production.
The Tokai Carbon acquisition 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 better meet the demand for lithium-ion batteries and run its operations responsibly such that they reduce the environmental impact.
The company is also on track with its long-term guidance to generate more than $1 billion during the next three years and expects a strong free cash flow to fund high-growth investments. It is also committed to returning capital to shareholders through dividends and share repurchases.
Cabot Corporation Price and Consensus
Cabot Corporation price-consensus-chart | Cabot Corporation Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 35.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 90% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 64.9% for the current year. ASIX's consensus estimate for current-year earnings has been revised 53% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 69% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 114.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 35.1% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.7%, on average. CMC has gained around 42% in a year.