Jefferies Raises CBT PT To $45 From $42

With more favorable fundamentals likely into 2011, limited balance sheet risk, a more favorable raw material environment, and ongoing structural improvements, Jefferies is reiterating its Buy rating on shares of Cabot Corp. CBT, and raise its target $3 to $45, 7x 2011E EBITDA. “We estimate normal business fluctuations can swing EPS as much as $0.05 in a quarter without providing a clear signal,” Jefferies writes. “That said, qualitatively we expect Cabot to reinforce customer confidence in an ongoing, if somewhat choppy, recovery. We expect rubber blacks to be roughly in line with Q4 and performance blacks to post a 3%-5% volume decline QoQ, offset by modestly favorable price/mix.” Cabot Corp. closed Monday at $39.12.