Maintaining Buy on RPM: Temporary Headwinds Mask Margin Recovery and Upside from Cost-Savings Initiatives

Analyst Matthew DeYoe from Bank of America Securities reiterated a Buy rating on RPM International and keeping the price target at $129.00.

Matthew DeYoe has given his Buy rating due to a combination of factors that, in his view, outweigh the recent earnings disappointment. While RPM’s latest quarter showed a notable earnings and margin miss, he attributes much of the weakness to temporary issues such as government-related project delays, unusual winter weather, and elevated operating costs tied to strategic initiatives and one-time items. He expects revenue growth to remain relatively resilient, arguing that the top-line performance—despite near-term headwinds—demonstrates underlying demand strength that is harder for peers to replicate. In his analysis, the current share price already reflects much of the bad news, leaving room for upside as profitability normalizes.

Looking ahead, DeYoe sees meaningful improvement in margins and earnings as cost pressures ease and management’s new productivity and cost-savings programs take hold. He highlights the announced $100 million SG&A reduction plan and the fading of temporary expenses like facility consolidation and salesforce build-out as key drivers of better operating leverage over the next 12 months. Although full-year EBITDA guidance has been revised lower, he notes that the outlook embeds a recovery from the unusually weak cost performance seen in the latest quarter. With a price objective of $129 versus a current price around $105, he concludes that the risk/reward profile remains favorable, supporting his Buy recommendation.

In another report released today, J.P. Morgan also upgraded the stock to a Buy with a $115.00 price target.

RPM’s price has also changed slightly for the past six months – from $112.510 to $106.610, which is a -5.24% drop .