Cabot Corporation’s CBT shares have popped around 23% over the past three months. The rally has been fueled by CBT's strong earnings performance, upward revisions to earnings guidance and robust performance across its business segments.

We are positive about the company’s prospects and believe that the time is right for you to add the stock to your portfolio as it looks promising and is poised to carry the momentum ahead.

Let’s take a look into the factors that make CBT stock a compelling choice for investors right now.

CBT Stock Outperforms Industry

Cabot has outperformed the rest of the Chemical - Diversified industry it belongs to over the past year. The company’s shares have shot up 61.4% compared with a 4.6% rise of its industry.

 

Image Source: Zacks Investment Research

CBT’s Earnings Estimates Northbound

Earnings estimates for CBT have been going up over the past 60 days. The Zacks Consensus Estimate for fiscal 2024 has increased by 4.3%. The consensus estimate for fiscal 2025 has also been revised 3.9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

CBT’s Impressive Earnings Surprise History

Cabot has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 8.6%, on average.

Cabot’s Stock Strong Growth Prospects

The Zacks Consensus Estimate for CBT's fiscal 2024 earnings is pegged at $7.07, suggesting a 31.4% increase from the previous year’s tally. Earnings are projected to increase 10.6% in fiscal 2025.

Strong Demand & Improved Mix Aid CBT Stock

CBT’s Performance Chemicals division is seeing strong growth driven by higher volumes and a favorable product mix, particularly in specialized carbons and fumed metal oxides. This growth is being supported by robust demand across the automotive, infrastructure and semiconductor markets. 

The Reinforcement Materials segment is also benefiting from higher volumes in Europe and Asia Pacific, improved pricing and a stronger product mix in 2024 customer agreements. CBT’s strong cash generation also facilitates a balanced capital allocation approach that emphasizes strategic investments, long-term earnings growth and shareholder returns while preserving a solid investment-grade balance sheet.

The company is optimistic about its fiscal fourth-quarter performance. It raised its fiscal 2024 adjusted earnings per share guidance to the range of $7.00-$7.10, calling for an increase of 30 cents at the midpoint. This revision is based on anticipated strong results from the Performance Chemicals segment, driven by higher demand and an enhanced product mix, coupled with continued strength in the Reinforcement Materials unit.