Cabot (CBT) Up 4.4% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Cabot (CBT). Shares have added about 4.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cabot due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Cabot Corporation before we dive into how investors and analysts have reacted as of late.

Cabot's Q4 Earnings and Sales Miss Estimates, Decline Y/Y

Cabot’s recorded fourth-quarter fiscal 2025 (ended Sept. 30, 2025) earnings of 79 cents per share, down from the year-ago quarter's $2.43. 

Cabot posted adjusted earnings of $1.70 per share, down from the year-ago quarter figure of $1.80. Adjusted earnings missed the Zacks Consensus Estimate of $1.72. 

The company’s net sales for the quarter were $899 million, which fell short of the Zacks Consensus Estimate of $952.6 million. Net sales fell around 10.2% from the prior-year quarter. 

Segment Highlights

Reinforcement Materials’ sales decreased around 12.6% year over year to $563 million in the reported quarter. It missed the Zacks Consensus Estimate of $617 million. Earnings before interest and tax (EBIT) in the segment were $119 million, down around 3.3% from the year-ago quarter. The decline in EBIT was primarily due to lower volumes in the Asia Pacific and the Americas.  

In the reported quarter, sales in the Performance Chemicals division declined 4.3% year over year to $308 million. It also missed the Zacks Consensus Estimate of $313 million. EBIT witnessed a decrease of approximately 4.6% to $42 million. The decline in EBIT was mainly due to 5% decrease in volumes. The lower volumes were mainly due to reduced demand in Europe, particularly in construction-related applications. Lower costs were aided by overall cost management and optimization efforts.  

Financials

The company concluded the fourth quarter of fiscal 2025 with a cash balance of $258 million. During the quarter, cash flows from operating activities were $219 million. Capital expenditures for the fiscal fourth quarter totaled $64 million. During the fourth quarter, cash was also used to pay dividends of $25 million and $39 million for share repurchases.  

Outlook

The company does not anticipate a recovery in the external environment for fiscal 2026, particularly given continued weakness in regional demand for Reinforcement Materials stemming from elevated Asian tire imports into Western markets. It expects adjusted EPS for the fiscal year to range between $6.00 and $7.00. The fiscal 2026 outlook incorporates the ongoing macroeconomic uncertainty, trade challenges and competitive pressures within Reinforcement Materials. In contrast, it expects Performance Chemicals to deliver overall profit growth, supported by strength in Battery Materials and opportunities across infrastructure, alternative energy and consumer-focused applications. It also anticipates robust operating and discretionary free cash flow to fund its growth initiatives.  

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -28.98% due to these changes.

VGM Scores

Currently, Cabot has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Cabot has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Cabot is part of the Zacks Chemical - Diversified industry. Over the past month, Methanex (MEOH), a stock from the same industry, has gained 3.7%. The company reported its results for the quarter ended September 2025 more than a month ago.

Methanex reported revenues of $927 million in the last reported quarter, representing a year-over-year change of -0.9%. EPS of $0.06 for the same period compares with $1.21 a year ago.

For the current quarter, Methanex is expected to post earnings of $0.87 per share, indicating a change of -29.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Methanex. Also, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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