RPM International (RPM – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Steve Byrne from Bank of America Securities reiterated a Sell rating on the stock and has a $94.00 price target.
Steve Byrne has given his Sell rating due to a combination of factors impacting RPM International’s financial outlook. One of the primary reasons is the anticipated slowdown in both commercial and residential construction and repair markets in the US, which is expected to be exacerbated by a broader economic deceleration. This situation could lead to deferred capital spending by both corporate and homeowner customers, resulting in a projected modest decline in organic sales growth across various segments by fiscal 2026.
Additionally, RPM’s recent financial performance has been underwhelming, with a reported EPS that fell short of consensus expectations. This was attributed to lower sales driven by unfavorable weather, sluggish demand in specialty OEM manufacturing, and foreign exchange headwinds. Furthermore, the company faces challenges from raw material inflation, which, despite mitigation efforts, could pressure margins in a softer demand environment. These factors collectively contribute to a more conservative price objective and the underperform rating.