Cabot Corporation’s CBT board has authorized it to buy back up to 10 million additional shares of its common stock, bringing the total number of shares available for repurchase to around 11 million.

Returning cash to shareholders is a critical component of the capital allocation system, and this authorization indicates the company's confidence in its expected earnings performance and cash flow generation over the future years.

Cabot's management will decide when and how many shares will be repurchased based on market circumstances and other criteria. Shares will be repurchased in the open market or privately negotiated transactions, utilizing CBT’s existing liquidity sources and future free cash flow. All repurchased shares will be retired and restored to the status of authorized but unissued common stock of the company. This authorization has no time restriction and can be suspended or terminated at any moment.

Shares of Cabot have gained 42.1% in the past year against a 4.7% rise of the industry.

Image Source: Zacks Investment Research

The company expects fiscal 2025 adjusted earnings per share (EPS) to be between $7.40 and $7.80, led by ongoing growth in the Reinforcement Materials segment and a steady recovery in the Performance Chemicals segment. This adjusted EPS range implies a 5% to 10% rise from the company's solid fiscal 2024 results. Furthermore, Cabot anticipates solid operational cash flow and discretionary free cash flow, driven by strong EBITDA, to enable ongoing investment in growth projects and capital return to shareholders.

CBT’s Rank & Key Picks

CBT currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, DuPont de Nemours, Inc. DD and CF Industries Inc. CF. 

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 163.4% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DD’s current-year earnings is pegged at $3.88 per share, indicating a year-over-year rise of 11.5%. DD, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 12.9%. The company's shares have rallied roughly 16.7% in the past year.

The Zacks Consensus Estimate for CF’s current-year earnings is pegged at $6.32 per share. CF, a Zacks Rank #1 stock, beat the consensus estimate in two of the last four quarters while missed twice, with the average earnings surprise being 10.3%. CF has rallied around 23.2% in the past year.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report

CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report

Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

Cabot Corporation (CBT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research