CBT Should I Buy
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Cabot Corp (CBT) is not a strong buy for a beginner investor with a long-term strategy at this time. While the technical indicators suggest a bullish trend, the lack of positive catalysts, weak financial performance, and mixed analyst ratings make it prudent to hold off on investing until clearer growth signals emerge.
The technical indicators show a bullish trend: MACD is positive and expanding, RSI is neutral at 64.754, and moving averages are aligned bullishly (SMA_5 > SMA_20 > SMA_200). Key resistance levels are at 79.564 and 81.999, with support levels at 71.679 and 69.244.
The company has a multi-year supply agreement with PowerCo, a subsidiary of Volkswagen, for EV battery production, which could support long-term growth in the EV sector. Gross margin increased slightly YoY to 24.85%.
Analysts have downgraded the stock due to weak demand for carbon black in tire and rubber products, with no recovery in sight. The stock has rallied 36% off its November low, suggesting limited upside potential in the near term.
In Q1 2026, Cabot's revenue dropped to $849 million (-11.10% YoY), net income fell to $72 million (-21.74% YoY), and EPS declined to $1.36 (-18.56% YoY). However, gross margin improved slightly to 24.85% (+0.98% YoY).
Analyst ratings are mixed. UBS raised the price target to $81 but maintained a Neutral rating. Mizuho downgraded the stock to Neutral with a price target of $75, citing weak demand for carbon black. Jefferies raised the price target to $81 and maintained a Buy rating due to the PowerCo agreement. JPMorgan lowered the price target to $54 and kept an Underweight rating, citing weak carbon black volumes and margin pressures.
