Shares of carbon black maker Cabot upgraded

Shares of carbon black maker Cabot Corp. could see increased activity Wednesday after an analyst raised his rating on the stock to "Buy" and increased his earnings estimates due to improving business prospects and the leadership of its new chief executive.

KeyBanc Capital Markets analyst Saul Ludwig said in a note that lower feedstock costs for Cabot's carbon black operations and reduced spending on "projects deemed to have questionable outlooks" mean higher earnings next year.

Specifically, Ludwig raised his 2009 earnings per share estimate to $2.60 from $2.21. Analysts polled by Thomson Reuters expect, on average, earnings per share next year to be $2.21.

The analyst also said one of Cabot's embryonic products, Aerogels, has recently received some large orders, "thus muting the losses in that business. The combination of lower spending and some commercial activity in new products should generate a 10 cents-per share positive swing next year."

Finally, the arrival last January of Chief Executive Patrick Prevost helps ensure a turnaround.

"He is a hard-core, results-driven executive and will likely expect his management team to be aggressive in improving the overall profitability."

Shares closed Tuesday at $28.11.