Cabot (CBT) Up 45% in 6 Months: What's Driving the Stock?

Cabot Corporation’s CBT shares have shot up 45% over the past six months. The company has also outperformed its industry’s rise of 20% over the same time frame. Moreover, it has topped the S&P 500’s 16.5% rise over the same period.

Let’s take a look into the factors behind this Zacks Rank #1 (Strong Buy) stock’s price appreciation.

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What’s Favoring CBT?

Strong earnings performance in the second quarter of fiscal 2021 and upbeat prospects have contributed to the rally in the company's shares. Cabot’s adjusted earnings and sales for the fiscal second quarter rose year over year and also surpassed the respective Zacks Consensus Estimate.

The company gained from strength in volumes in all regions and favorable pricing in the Reinforcement Materials segment in the fiscal second quarter. Its Performance Chemicals segment also benefited from higher volumes and improved product mix, courtesy of higher sales in automotive applications.

Cabot, in its second-quarter call, stated that it expects continued demand strength across all its segments in the second half of the fiscal. The company envisions volumes to remain strong through the second half.

Cabot should gain 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. The company saw strong volumes in the tire and automotive markets in the fiscal second quarter on the back of continued global recovery. Passenger car miles driven and automotive builds have improved while strong truck miles driven is driving the replacement tire market. The company is also benefiting from strength in infrastructure, packaging and consumer-driven applications.

Earnings estimates for Cabot have also been going up over the past two months. The Zacks Consensus Estimate for fiscal 2021 has increased around 17.2% while the same for third-quarter fiscal 2021 has gone up 14.9%. The favorable estimate revisions instill investor confidence in the stock.

Cabot Corporation Price and Consensus

Cabot Corporation Price and ConsensusCabot Corporation Price and Consensus
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 Univar Solutions Inc. UNVR, Nucor Corporation NUE and Impala Platinum Holdings Limited IMPUY.

Univar has a projected earnings growth rate of roughly 35.2% for the current year. The company’s shares have rallied around 53% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 259.9% for the current year. The company’s shares have surged around 130% in a year. It currently sports a Zacks Rank #1.

Impala Platinum has an expected earnings growth rate of 225.2% for the current fiscal. The company’s shares have surged around 162% in the past year. It currently carries a Zacks Rank #2 (Buy).

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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