Higher activated carbon prices
On September 21, Cabot (CBT) announced that it plans to increase activated carbon prices. The price increase will be effective on October 1 or as the contract allows. The price increase will be 5%–10% globally.
Cabot said that activate carbon prices are increasing due to higher raw material prices, currency fluctuations, and increased freight costs. The price increase could be positive for Cabot, which could help improve the revenues if the volumes remain stable. In the third quarter, Cabot reported revenue growth of 21.1%. The trend is expected to continue in the upcoming quarter. Higher prices will play a major role in achieving the objective.
Cabot stock remained positive during the week. The stock gained 4.3% and closed at $65.69 for the week ending September 21. The stock, which was trading on par with its 100-day moving average price, is trading 4.4% above the 100-day moving average price of $62.95. Investors will have to wait and see if the level can be maintained.
On a year-to-date basis, Cabot stock has gained 5.0%%, while Albemarle (ALB) and PPG Industries (PPG) have declined 17.75% and 1.9%, respectively. In contrast, Celanese (CE) has gained 8.9%. Cabot’s 14-day relative strength index of 60 indicates that the stock isn’t overbought or oversold. However, analysts are bullish on Cabot stock. Analysts have recommended a target price of $75.83, which implies a return potential of 15.4% from its closing price on September 21.
Investors could hold Cabot indirectly by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 0.6% of its portfolio in Cabot as of September 21.