In a press release on October 10, Cabot (CBT) said that the Department of Energy selected the company to participate in advanced vehicle technologies research. The Department of Energy has initiated 42 projects in advanced vehicle technologies that could help in affordable mobility. The Department of Energy has set aside $80 million to be invested in the field—$32 million is allocated towards battery and electrification.
Through Cabot’s novel process technology, the company will contribute to developing a low-cobalt lithium-ion battery. The Department of Energy’s $2.9 million assistance should boost the company’s research. Cabot will partner with Argonne National Lab and SAFT.
Patricia Hubbard, Cabot’s chief technology officer, said, “We are honored to be selected to participate in this important initiative.” She also said, “We are excited to leverage our battery materials manufacturing expertise to expand our existing presence in the batteries and energy materials market. This project will help drive sustainability, innovation and new technologies, which are all crucial elements of our long-term strategy and vision.”
The volatile US stock market took a toll on Cabot. Cabot stock declined 16.2% and closed at $53.41 for the week ending October 12. Lower stock prices caused a trend reversal in Cabot’s 100-day moving average. Now, the stock trades 15.7% below the 100-day moving average price of $63.34.
On a year-to-date basis, Cabot stock has been negative and fell 13.3%. Albemarle (ALB), PPG Industries (PPG), and Celanese (CE) have declined 25.7%, 19.5%, and 7.8%, respectively. However, Cabot’s 14-day relative strength index of 20 suggests that the stock has temporarily moved into an “oversold” position. Analysts are bullish on Cabot stock and have recommended a target price of $75.9, which implies a return potential of 42% from its closing price on October 12.
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 October 12.