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Cabot Corporation
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NYSE: CBT Materials Chemicals 🔎 Screen
$4.0B
Market Cap
12.6
P/E
0.92
PEG
38.7%
ROCE
235.0%
ROE
5.61
D/E
16.7%
OPM
-19.3%
% from 52W High
46
α RS
🔍 CBT is showing a multi-screen setup because it matches 3 of 39 tracked screener presets and it's within 19.3% of its 52-week high. The main caution: the Strong Profitability preset's Backtest win rate is only 43.7%. Net: Mixed signal stack, not a recommendation. ? Conviction 52W High Backtest
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Conviction 3/39 · 19.3% from 52W high · Backtest win rate 43.7%
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About

Cabot Corporation operates as a specialty chemicals and performance materials company. It operates through two segments, Reinforcement Materials and Performance Chemicals. The company offers reinforcing carbons that are 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 solutions. It also provides specialty carbons for use in inks, coatings, plastics, adhesives, toners, batteries, and displays; conductive additives and fumed alumina used in lead acid and lithium-ion batteries for electric vehicles; fumed silica used in adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries, and pharmaceuticals; and fumed alumina for use in various products, including inkjet media, lighting, coatings, cosmetics, and polishing slurries. In addition, it offers aerogel, a hydrophobic, silica-based particle to use in various thermal insulation and specialty chemical applications; masterbatch and conductive compound products that are used in automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics industries; and inkjet colorants for inkjet printing applications, as well as carbon nanotubes and fumed metal oxides. 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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3-Statement Financial Model
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🎙 Management Tone Confident Specific ~ Volatile 4 quarters Full tone analysis in Intelligence →
📊 MIXED Cabot Corporation Q2 FY2026 adjusted EPS $1.61, RM EBIT $93M, PC EBIT $59M
Revenue & Profitability
Adjusted EPS was $1.61 in Q2 FY2026, down from $1.90 in the prior year quarter. Reinforcement Materials EBIT decreased 29% to $93 million, while Performance Chemicals EBIT increased 18% to $59 million. Cash flow from operations was $77 million, and discretionary free cash flow was $63 million. The company returned $73 million to shareholders ($24 million in dividends, $49 million in share repurchases). Debt balance was $1.3 billion with net debt/EBITDA of 1.5x. The tax rate was 28%.
Outlook
Management reaffirmed full-year FY2026 adjusted EPS guidance of $6.00-$6.50, with assumptions on energy prices and demand. They noted encouraging momentum as volumes accelerated in March and remained strong into April. However, the Iran conflict introduces uncertainty, particularly in Q4, with potential demand softening in Asia due to raw material reliance on the Middle East. If current demand levels hold, performance would track toward the upper end of guidance; a modest moderation in Q4 would put performance at the midpoint.
Growth Drivers
Battery materials is a key growth driver, delivering 43% revenue growth year-over-year in Q2 FY2026, driven by China and Europe. The company expects approximately $40 million in EBITDA from battery materials in FY2026. Other growth areas include data center infrastructure (battery energy storage, power distribution, thermal management) and specialty carbons. Management highlighted the multi-year PowerCo agreement and the build-out of gigafactories in Western geographies as supporting long-term growth.
Balance Sheet & CapEx
Capital expenditures in Q2 FY2026 were $45 million, and the full-year FY2026 guidance is $200-$230 million. The company is also executing capacity rationalization actions, including ceasing manufacturing in Argentina and planned closures of multiple lines in the Netherlands, representing 120,000 metric tons of capacity. These actions target an annual run-rate cost benefit of approximately $22 million, with cash costs of about $24 million over two to three years.
Margins
Reinforcement Materials gross profit per ton declined due to calendar year 2026 customer agreement outcomes and increased competitive intensity in Asia, more than offsetting a 3% volume increase. Performance Chemicals gross profit per ton improved from favorable product mix and optimization efforts. Battery materials trailing 12-month EBITDA margins were approximately 24%. For Q3 FY2026, Reinforcement Materials expects sequential EBIT improvement of $5-$7 million from mix and yield improvements, while Performance Chemicals EBIT is expected to be relatively consistent sequentially.
Key Risks
Management highlighted the Iran conflict as a new geopolitical uncertainty, with potential disruptions in the Middle East affecting raw material sourcing and customer demand, particularly in Asia. Energy cost volatility is a risk, partly mitigated by raw material pass-through mechanisms in Reinforcement Materials and proactive pricing actions in Performance Chemicals (up to 20% increase in March). Other risks include potential supply chain disruptions or more cautious customer purchasing behavior leading to demand softening. Sales volumes have remained strong to date with minimal customer disruptions.
Generated by AI · Q2 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q3 2026 Q3 2026 2026-08-04
Q3 FY26 saw adjusted EPS rise 4% sequentially, with strong Performance Chemicals growth and robust cash generation. Battery materials remain a key growth driver, supported by capacity expansions and favorable market trends. Fiscal 2026 EPS guidance was tightened to $6.15–$6.45.
Q2 2026 Q2 2026 2026-05-06
Adjusted EPS fell 15% year-over-year to $1.61, with strong Performance Chemicals offsetting weaker Reinforcement Materials. Battery materials revenue surged 43% year-over-year, and cost-saving actions plus a 5% dividend increase were announced.
Q1 2026 Q1 2026 2026-02-04
Adjusted EPS fell 13% year-over-year to $1.53, with strong cash flow and robust growth in battery materials. Reinforcement Materials faced volume and pricing pressure, while Performance Chemicals saw EBIT growth. FY2026 EPS guidance is $6.00–$6.50.
Q4 2025 Q4 2025 2025-11-04
Record adjusted EPS and EBITDA were achieved in FY25 despite lower volumes and challenging macro conditions. FY26 guidance anticipates lower EPS amid continued trade and demand uncertainty, but strong cash flow and strategic investments in battery materials and sustainability remain priorities.
Q3 2025 Q3 2025 2025-08-05
Q3 adjusted EPS was $1.90, flat sequentially and down 1% year-over-year, with strong cash flow and continued shareholder returns. Strategic progress included a $70M acquisition in Mexico and ongoing investments in growth areas. Full-year EPS guidance reaffirmed at $7.15–$7.50.
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📊 Analysis Methodology

This comprehensive investment analysis was conducted using The Finmagine™ Stock Analysis & Ranking Methodology, a proprietary framework that systematically evaluates stocks across five critical dimensions: Financial Health, Growth Prospects, Competitive Positioning, Management Quality, and Valuation.

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Conflict of Interest Disclosure:
The author and/or analyst may currently hold or have previously held positions in the securities discussed. Any such positions are not intended to influence the objectivity or independence of the analysis. This research is produced independently and is not sponsored, endorsed, or commissioned by any company or institution.

Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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