CBT heads into its August 4 earnings release with short sellers pulling back and options traders holding a notably bullish tilt — an unusual combination for a stock carrying meaningful short interest.
The most striking signal is in options. The put/call ratio of 0.14 is extremely low by historical standards, running near the bottom of its 52-week range and only modestly above its annual floor of 0.07. Even with a slight uptick over the past two weeks — the ratio climbed from around 0.08 in mid-July to 0.14 now — it remains well below the 20-day mean, suggesting the options market is leaning heavily toward calls rather than hedging for downside. Short interest simultaneously retreated almost 6% over the past week to 6.8% of the free float, after a brief spike above 7% in late July. Borrow conditions remain loose: availability is ample at roughly 529% of outstanding short interest, and the cost to borrow has eased around 25% over the past month to just 0.44%, leaving no meaningful friction for new short positions. Together, the setup reads as cautiously constructive — short sellers are trimming rather than pressing, and options traders are not paying up for protection.
Analyst opinion has moved decisively in one direction in recent months. Truist Securities initiated coverage with a Buy and a $98 target in June, while Mizuho raised its target from $80 to $90 that same month — both moves arriving well above where the stock traded earlier in the year. JPMorgan remains the outlier, maintaining an Underweight with a $70 target, a reading that now sits roughly 22% below the current price of $89.58 and implies a more cautious view on the commodity chemicals cycle. The consensus lands at Hold, with a mean target of $91.40, implying minimal upside from here. That narrow gap between price and target matters: the stock has risen roughly 33% year-to-date, and with EV/EBITDA at 7.5x ticking gradually lower over the past month, bulls need the print to justify what has been a strong re-rating. Bears, anchored by JPMorgan's Underweight, argue the stock is running ahead of fundamentals in a sector where volume and margin are still sensitive to macro conditions.
Among correlated peers, CBT has been trading with notable divergence. Most closely correlated names have struggled recently — OEC dropped more than 3% on the week and AVNT fell a similar amount, while PPG lost nearly 5%. CBT has been largely insulated, adding 0.2% on the week and 1.8% on Monday alone. That relative strength, combined with the low put/call ratio and retreating short interest, points to a market that has been leaning into rather than against the print.
The earnings release tests whether Cabot's volume recovery and margin profile can sustain a valuation that now sits close to the upper bound of Street expectations — and whether the lone Underweight voice at JPMorgan is early or simply wrong.
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