Chemicals firm Cabot beats Q1 adjusted EPS expectations

Overview

• Specialty chemicals firm's fiscal Q1 adjusted EPS beat analyst expectations despite a 13% decrease

• Reinforcement Materials segment EBIT fell 22% yr/yr due to lower volumes

• Company signed multi-year supply agreement with PowerCo SE for battery materials

Outlook

• Cabot narrows full-year Adjusted EPS guidance to $6.00-$6.50 per share

• Company expects earnings growth in Performance Chemicals, driven by Battery Materials

• Cabot plans cost reductions in Reinforcement Materials amid challenging demand

Result Drivers

• REINFORCEMENT MATERIALS DECLINE - EBIT for Reinforcement Materials fell 22% due to lower volumes in Americas and Asia Pacific

• PERFORMANCE CHEMICALS GROWTH - EBIT for Performance Chemicals rose 7% due to favorable product mix and strong Battery Materials

• SUPPLY AGREEMENT - Multi-year agreement with PowerCo SE to supply battery materials expected to support growth

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the specialty chemicals peer group is "buy."

• Wall Street's median 12-month price target for Cabot Corp is $74.00, about 1.6% above its February 2 closing price of $72.86

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nGNX6cRSVx

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.