Overview
Mizuho has lowered its rating on Cabot Corporation (NYSE: CBT) from Outperform to Neutral and reduced its price target to $75 from $80. The specialty chemicals producer is quoted at $78.73 and carries a price-to-earnings ratio of 13.29, according to InvestingPro data.
Reasoning behind the downgrade
The research house pointed to a persistently weak demand environment for carbon black in tire and rubber products - a core segment of Cabot’s business - and concluded that there is no recovery visible in the near term. As part of its reassessment, Mizuho trimmed its earnings per share forecasts to reflect the softer demand outlook. Fiscal 2026 EPS was lowered to $6.30 from $6.65, and fiscal 2027 EPS was reduced to $6.95 from $7.60. Both of these projections sit beneath the current Bloomberg consensus estimates of $6.46 for 2026 and $7.15 for 2027.
Recent company results and guidance
The downgrade follows Cabot’s December quarter 2025 results. Those results included updated earnings guidance covering the remaining nine months of fiscal year 2026 that was approximately 8% below Mizuho’s prior estimate, prompting the analyst to rework both near-term forecasts and the stock rating.
Valuation framework
Mizuho’s revised $75 price target reflects an implied next-twelve-months price-to-earnings multiple near 10.5x. The firm notes that this multiple equates to roughly 0.67 times the S&P SMIDCap SpecialtyChem Index, versus a five-year median of about 0.59, indicating Mizuho’s view of relative valuation within the specialty chemicals peer group.
Market moves and performance
Mizuho also observed that Cabot shares have climbed roughly 36% from their November low. InvestingPro data cited in the research note shows an 18.78% year-to-date return for the stock, though the share price remains down 8.59% over the trailing 12 months.
Other recent developments at Cabot
Separately, Cabot reported first-quarter earnings per share of $1.53, beating consensus and Jefferies’ forecast by $0.20. After that report, Jefferies raised its price target on Cabot to $85 while keeping a Buy rating. The company also finalized the acquisition of Mexico Carbon Manufacturing S.A. de C.V., a deal completed after obtaining regulatory approvals that places the acquired operations near Cabot’s existing Altamira, Mexico facility and is intended to bolster the company’s global manufacturing footprint and operational flexibility in reinforcing carbon products.
Cabot announced proposed changes to its board, including the nomination of Thierry Vanlancker for election at the 2026 Annual Meeting, with a potential term extending to 2029. On the sustainability front, Cabot earned an A- rating for Water Security from CDP, an improvement from a B in 2024, while its Climate Change score remained at B. In addition, Jefferies previously raised a separate Cabot price target to $81 tied to a supply agreement with PowerCo for conductive carbons used in electric vehicle batteries in Europe.
What this means for investors
Mizuho’s downgrade and lower EPS outlook reflect the firm’s assessment that carbon black demand in key markets remains subdued and that near-term company guidance is weaker than previously modeled. The adjusted valuation multiple and downward estimate revisions signal a more cautious stance from the analyst amid these demand headwinds.
Summary
Mizuho cut Cabot to Neutral and trimmed its price target to $75 after the company’s December quarter guidance came in below prior expectations and the analyst concluded there is no sign of recovery in carbon black demand for tire and rubber products. The firm reduced fiscal 2026 and 2027 EPS estimates and set its valuation at roughly 10.5x next-twelve-months earnings, or about 0.67 times the S&P SMIDCap SpecialtyChem Index.