J.P. Morgan Adjusts Cabot Corporation Estimates

Cabot Corporation CBT performance in F2010 (ended September) represented almost a full recovery from a weak F2009, and the company appears to be on track to achieve its F2012 EPS target of $3.00/sh in F2011, J.P. Morgan reports. “Cabot reported $2.82/sh EPS for the full F2010 compared to $0.15/sh in F2009; volumes in all of the businesses improved by about 20%,” J.P. Morgan writes. “Moreover, end-market demand remains 5-10% below the peak 2008 levels, and we forecast a more steady sales growth of 5-6% for F2011.” J.P. Morgan has adjusted downward its EPS forecast for F2011 from $3.25 to $3.00 mainly to account for raw material pressure in carbon blacks, adding, “Our new F2012 EPS projection is $3.20 versus $3.40 prior.” Cabot Corporation currently trades at $35.22.