Is Cabot Corp. overvalued or undervalued?

As of 30 June 2025, Cabot Corp. has moved from expensive to attractive, indicating a potential shift in valuation perspective. The company appears undervalued, with a P/E ratio of 9, significantly lower than its peer average of approximately 9.36. Additionally, Cabot's EV to EBITDA stands at 6.50, which is more favorable compared to Westlake Corp.'s 9.98 and Albemarle Corp.'s 26.19, further supporting the undervaluation thesis.
In terms of financial performance, Cabot boasts a robust ROE of 32.92% and an impressive ROCE of 25.57%, reflecting strong operational efficiency. Despite recent stock performance showing a YTD return of -14.48% compared to the S&P 500's 12.22%, the long-term outlook remains positive, with a 5-year return of 97.75%, slightly ahead of the S&P 500's 96.61%. This combination of attractive valuation ratios and strong financial metrics suggests that Cabot Corp. is currently undervalued in the specialty chemicals sector.