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1. Company Snapshot

1.a. Company Description

Cabot Corporation operates as a specialty chemicals and performance materials company.It operates through three segments: Reinforcement Materials, Performance Chemicals, and Purification Solutions.The company offers reinforcing carbons used in tires as a rubber reinforcing agent and performance additive, as well as in industrial products, such as hoses, belts, extruded profiles, and molded goods; and engineered elastomer composites.


It also provides specialty carbons used in inks, coatings, plastics, adhesives, toners, batteries, and displays applications; masterbatch and conductive compound products for use in automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics industries; inkjet colorants used in the inkjet printing applications; fumed silica used in adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries, and pharmaceuticals; fumed alumina used in various products, including inkjet media, lighting, coatings, cosmetics, and polishing slurries; and aerogel, a hydrophobic, silica-based particle for use in various thermal insulation and specialty chemical applications.In addition, the company offers activated carbon products used for the purification of water, air, food and beverages, pharmaceuticals, and other liquids and gases; and activated carbon solutions for activated carbon injection in coal-fired utilities, mobile water filter units, and carbon reactivation services.The company sells its products through distributors and sales representatives in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.


Cabot Corporation was founded in 1882 and is headquartered in Boston, Massachusetts.

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1.b. Last Insights on CBT

Breaking News: Cabot Corporation reported Q1 2026 earnings that beat estimates, despite a decrease in sales due to lower volumes. The company's Reinforcement Materials segment experienced weak demand. As a result, full-year EPS guidance was narrowed. The earnings release was announced on February 4, 2026. Analysts recommend a hold on the stock, citing the mixed results. The company's ability to maintain profitability despite lower sales volumes is noted. Further evaluation of the company's performance is necessary to determine future prospects.

1.c. Company Highlights

2. Cabot's Q1 FY2026 Earnings: A Strong Performance Amidst Challenges

Cabot Corporation reported adjusted earnings per share (EPS) of $1.53 in the first quarter of fiscal year 2026, surpassing analyst estimates of $1.4. The company's financial performance was characterized by a mix of challenges and opportunities, with the Reinforcement Materials segment facing headwinds due to lower volumes in the Americas and Asia Pacific, resulting in a 22% decline in EBIT compared to the same quarter last year. In contrast, the Performance Chemicals segment delivered a 7% increase in EBIT, driven by a more favorable product mix and continued momentum in the Battery Materials product line, which saw revenue growth of 39% year-over-year.

Publication Date: Feb -06

📋 Highlights
  • Adjusted Earnings Per Share:: Declined to $1.53 (Q1 2026) from prior year, down 13% due to Reinforcement Materials EBIT drop of 22%.
  • Performance Chemicals Growth:: EBIT increased 7% YoY, driven by Battery Materials revenue growth of 39% and favorable product mix.
  • Battery Materials Momentum:: Secured a multi-year PowerCo (Volkswagen) contract for conductive additives, aligning with EV and energy storage expansion.
  • Operational Cash Flow Strength:: Generated $126M in Q1 operating cash flow, enabling growth investments and shareholder returns.
  • 2026 Guidance Narrowed:: EPS guidance reduced to $6–$6.50, reflecting Reinforcement Materials EBIT decline and lower pricing from 2026 annual agreements.

Segment Performance

The Reinforcement Materials segment faced challenges due to elevated tire imports in Western geographies, leading to lower local carbon black capacity utilization. In response, Cabot is rationalizing its carbon black capacity in the Americas and Europe to enhance profitability and maintain flexibility. On the other hand, the Performance Chemicals segment, particularly the Battery Materials product line, continued to demonstrate strong growth, driven by the increasing demand for electric vehicles and energy storage applications. The company's agreement with PowerCo, a subsidiary of Volkswagen Group, to supply conductive additives for their battery production, further underscores its position in the growing battery materials market.

Outlook and Guidance

Cabot narrowed its adjusted EPS guidance range for fiscal year 2026 to between $6 and $6.50, reflecting lower pricing year-over-year driven by the annual agreements and low single-digit volume growth in Performance Chemicals. The company expects continued strong free cash flow generation, driven by robust operating cash flow and moderating capital expenditure spending. With a strong balance sheet and cash flow generating capacity, Cabot has the flexibility to invest in strategic growth opportunities, maintain its global asset base, and return cash to shareholders through dividends and share repurchases.

Valuation and Metrics

With a P/E Ratio of 12.92 and an EV/EBITDA ratio of 6.31, Cabot's valuation appears reasonable, considering its leadership position and technology leadership in the industry. The company's ROE of 20.45% and ROIC of 12.23% indicate strong profitability. Additionally, the Dividend Yield of 2.33% and Free Cash Flow Yield of 10.07% suggest that Cabot is an attractive investment opportunity, with a strong potential for returns. Analysts estimate next year's revenue growth at 2.9%, which is a relatively modest growth rate, but Cabot's diversified portfolio and strong market position are expected to drive long-term value creation.

3. NewsRoom

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Cabot Expands Mexico Footprint With MXCB Facility Buyout

Feb -05

Source: zacks.com

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Cabot Corporation (CBT) Q1 2026 Earnings Call Transcript

Feb -04

Source: seekingalpha.com

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Cabot Q1 Earnings Beat Estimates, Sales Down Y/Y on Lower Volumes

Feb -04

Source: zacks.com

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Cabot (CBT) Q1 Earnings Surpass Estimates

Feb -03

Source: zacks.com

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Cabot Corporation Reports First Quarter Fiscal Year 2026 Results

Feb -03

Source: globenewswire.com

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Cabot Corporation Board Declares Dividend

Feb -02

Source: globenewswire.com

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Cabot Corporation Completes Acquisition of Mexico Carbon Manufacturing S.A. de C.V. from Bridgestone Corporation

Feb -02

Source: globenewswire.com

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Teacher Retirement System of Texas Raises Stock Holdings in Cabot Corporation $CBT

Feb -01

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.56%)

6. Segments

Reinforcement Materials

Expected Growth: 3.5%

Cabot Corporation's Reinforcement Materials segment growth of 3.5% is driven by increasing demand for energy-efficient tires, growth in the global automotive market, and rising adoption of electric vehicles. Additionally, the segment benefits from Cabot's strong market position, innovative product offerings, and strategic partnerships with leading tire manufacturers.

Performance Chemicals

Expected Growth: 3.8%

Cabot Corporation's Performance Chemicals segment growth of 3.8% is driven by increasing demand for specialty additives in the automotive and construction industries, as well as growing adoption of sustainable and energy-efficient solutions. Additionally, strategic investments in research and development, and expansion into emerging markets, have contributed to the segment's growth.

Unallocated and Other

Expected Growth: 2.5%

Cabot Corporation's Unallocated and Other segment growth of 2.5% is driven by increased demand for specialty chemicals and additives in the automotive and construction industries, as well as cost savings initiatives and strategic pricing actions.

7. Detailed Products

Reinforcement Materials

Carbon black, silica, and other reinforcing materials used in tires, rubber, and plastics

Performance Materials

Specialty carbons, fumed silica, and alumina used in coatings, inks, and plastics

Purification Solutions

Activated carbon, zeolites, and other materials used for air and water purification

Specialty Carbons

High-performance carbons used in energy storage, electronics, and other applications

Metal Oxides

Alumina, silica, and other metal oxides used in ceramics, catalysts, and other applications

8. Cabot Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Cabot Corporation is medium due to the availability of alternative products from competitors, but the company's strong brand reputation and product quality help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Cabot Corporation due to the company's strong relationships with its customers and its ability to provide customized solutions that meet their specific needs.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Cabot Corporation due to the company's dependence on a few key suppliers for certain raw materials, but the company's strong relationships with its suppliers help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low for Cabot Corporation due to the high barriers to entry in the specialty chemicals industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high for Cabot Corporation due to the competitive nature of the specialty chemicals industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.24%
Debt Cost 6.64%
Equity Weight 49.76%
Equity Cost 10.27%
WACC 8.45%
Leverage 100.95%

11. Quality Control: Cabot Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NewMarket

A-Score: 6.9/10

Value: 4.5

Growth: 7.2

Quality: 7.2

Yield: 4.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Cabot

A-Score: 5.4/10

Value: 6.9

Growth: 6.4

Quality: 5.7

Yield: 5.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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RPM International

A-Score: 5.3/10

Value: 3.8

Growth: 6.3

Quality: 5.8

Yield: 4.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Balchem

A-Score: 4.9/10

Value: 1.9

Growth: 5.4

Quality: 7.5

Yield: 1.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

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Innospec

A-Score: 4.5/10

Value: 5.0

Growth: 4.1

Quality: 4.8

Yield: 3.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

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Olin

A-Score: 4.1/10

Value: 7.1

Growth: 4.3

Quality: 2.4

Yield: 6.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.58$

Current Price

74.58$

Potential

-0.00%

Expected Cash-Flows