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RPM International (RPM)
:RPM
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RPM International
(NYSE:RPM)77Outperform
Positive Factors
Financial Performance
RPM delivered double-digit EPS growth despite tough housing/construction markets and a customer bankruptcy as it drives share gains, benefits from improved focus/management of a number of businesses, and benefits from continued savings from MAP25.
Market Position
RPM is well-positioned with approximately 80% in North America, leading positions in products for re-shoring and infrastructure.
Negative Factors
Weather Impact
Recent poor weather in the Southern U.S. may have an impact on RPM's performance.
RPM International (RPM) vs. S&P 500 (SPY)
Market Cap
$15.99B
Dividend Yield1.56%
Average Volume (3M)639.43K
Price to Earnings (P/E)24.6
Beta (1Y)1.06
Revenue Growth0.12%
EPS Growth24.30%
CountryUS
Employees17,207
SectorBasic Materials
Sector Strength56
IndustryChemicals
Share Statistics
EPS (TTM)5.06
Shares Outstanding128,568,280
10 Day Avg. Volume627,506
30 Day Avg. Volume639,426
Financial Highlights & Ratios
PEG Ratio1.01
Price to Book (P/B)N/A
Price to Sales (P/S)2.18
Price to Cash Flow (P/CF)14.30
P/FCF Ratio13.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$136.00Price Target Upside10.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
RPM International Business Overview & Revenue Model
Company DescriptionRPM International Inc. is a multinational company specializing in the manufacturing and marketing of high-performance specialty coatings, sealants, and building materials. Headquartered in Medina, Ohio, RPM operates in various sectors including industrial, consumer, and specialty segments. Its core products and services include roofing systems, specialty coatings, sealants, and adhesives that serve diverse markets such as construction, industrial maintenance, automotive, and consumer goods.
How the Company Makes MoneyRPM International makes money through the sale of its wide range of specialty coatings, sealants, and building materials across its three primary business segments: Industrial, Consumer, and Specialty. The Industrial segment generates revenue by providing coatings and sealants for industrial maintenance and construction applications. The Consumer segment focuses on products sold to home improvement and hardware retailers, including paints, stains, and sealants for DIY consumers. The Specialty segment caters to niche markets with unique product requirements, such as marine coatings and restoration services. RPM's revenue is further bolstered by its strategic acquisitions and partnerships, which expand its product offerings and market reach. The company also benefits from its global distribution network, enabling it to serve customers in various regions efficiently.
RPM International Financial Statement Overview
Summary
RPM International exhibits strong financial health with consistent revenue and profit growth, solid margins, and improved cash flow efficiency. The company has successfully reduced its leverage, enhancing stability in its financial structure. These factors position RPM well for future growth and resilience against industry fluctuations.Income Statement
RPM International demonstrates robust revenue growth, with a TTM revenue of $7.35 billion, showing a consistent upward trend from $5.51 billion in 2020. The gross profit margin is healthy at approximately 41.4% for TTM, and net profit margin improves to 8.9% from the previous year, indicating strong profitability. EBIT and EBITDA margins are also robust at 12.4% and 15.0% respectively, reflecting effective cost management and operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a solid equity position with a debt-to-equity ratio improving to 0.11 in TTM, indicating reduced leverage. Return on Equity (ROE) is strong at 24.0% for TTM, showcasing effective utilization of equity. The equity ratio stands at 40.6%, suggesting a stable financial structure, although there is a significant presence of liabilities.78
Positive
Cash Flow
Cash flow analysis reveals strong operational cash generation with an operating cash flow to net income ratio of 1.35 for TTM, indicating effective conversion of income to cash. Free cash flow has grown significantly, with a growth rate of 103.5% from 2023 to 2024 TTM, highlighting improved cash efficiency and potential for reinvestment or debt reduction.82
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.35B | 7.34B | 7.26B | 6.71B | 6.11B | 5.51B | Gross Profit |
| 3.04B | 3.01B | 2.75B | 2.43B | 2.41B | 2.09B | EBIT |
| 913.74M | 885.16M | 478.70K | 656.62M | 727.49M | 532.14M | EBITDA |
| 1.10B | 1.08B | 916.57M | 809.69M | 874.35M | 688.98M | Net Income Common Stockholders |
| 652.71M | 588.40M | 478.69M | 491.48M | 502.64M | 304.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 268.68M | 237.38M | 215.79M | 201.67M | 246.70M | 233.42M | Total Assets |
| 6.68B | 6.59B | 6.78B | 6.71B | 6.25B | 5.63B | Total Debt |
| 2.33B | 2.47B | 2.97B | 2.95B | 2.64B | 2.78B | Net Debt |
| 2.06B | 2.24B | 2.75B | 2.75B | 2.39B | 2.55B | Total Liabilities |
| 3.97B | 4.07B | 4.64B | 4.72B | 4.51B | 4.37B | Stockholders Equity |
| 2.72B | 2.51B | 2.14B | 1.98B | 1.74B | 1.26B |
| Cash Flow | Free Cash Flow | ||||
| 656.63M | 908.34M | 322.67M | -43.67M | 608.96M | 402.16M | Operating Cash Flow |
| 882.03M | 1.12B | 577.11M | 178.73M | 766.16M | 549.92M | Investing Cash Flow |
| -293.34M | -206.44M | -249.70M | -259.55M | -326.39M | -209.61M | Financing Cash Flow |
| -566.15M | -890.03M | -301.16M | 57.39M | -459.62M | -316.87M |
RPM International Technical Analysis
Negative
122.55
Price Trends
123.52
Negative
128.15
Negative
121.19
Positive
Market Momentum
-0.34
Negative
47.83
Neutral
62.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPM, the sentiment is Negative. The current price of 122.55 is below the 20-day moving average (MA) of 122.59, below the 50-day MA of 123.52, and above the 200-day MA of 121.19, indicating a neutral trend. The MACD of -0.34 indicates Negative momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 62.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RPM.
RPM International Risk Analysis
RPM International disclosed 28 risk factors in its most recent earnings report. RPM International reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RPM International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.73B | 19.66 | 21.49% | ― | 1.77% | 47.48% | |
77 Outperform | $15.99B | 24.57 | 25.61% | 1.56% | 0.12% | 24.30% | |
71 Outperform | $90.51B | 34.12 | 69.05% | 0.79% | 0.20% | 14.31% | |
65 Neutral | $26.18B | 19.34 | 19.13% | 2.33% | -4.59% | 11.09% | |
62 Neutral | $2.41B | 6.78 | 17.67% | ― | 32.42% | -56.26% | |
60 Neutral | $3.10B | 24.84 | 7.27% | 1.56% | 1.65% | -10.99% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% |
* Basic Materials Sector Average
Performance Comparison
RPM
RPM International
122.55
6.86
5.93%
FUL
H.B. Fuller Company
57.05
-21.28
-27.17%
PPG
PPG Industries
115.48
-23.95
-17.18%
SHW
Sherwin-Williams Company
363.62
26.04
7.71%
AXTA
Axalta Coating Systems
34.93
1.64
4.93%
VAL
Valaris
37.39
-31.98
-46.10%
RPM International Earnings Call Summary
Earnings Call Date: Jan 7, 2025 | % Change Since: 2.18% | Next Earnings Date: Apr 3, 2025
Earnings Call Sentiment Neutral
RPM reported record financial performance and positive growth across all segments, driven by strategic operating improvements and market outperformance. However, the company faces challenges from customer bankruptcies, adverse weather, and macroeconomic headwinds, particularly in Europe. Despite these challenges, RPM maintains a positive outlook for the year, supported by MAP 2025 benefits and a strong balance sheet.Highlights
Record Sales and Earnings
RPM reported record sales, adjusted EBIT margin, and adjusted EPS for the second quarter of fiscal 2025, despite a challenging macroeconomic environment.
Positive Organic Growth Across Segments
Each of RPM's segments reported positive organic volume and sales growth, leveraging a focus on repair, maintenance, and entrepreneurial culture.
Continued MAP 2025 Benefits
The MAP 2025 operating improvements delivered significant benefits, including a 7.7% increase in adjusted EBIT and a 13.9% increase in adjusted EPS.
Strong Cash Flow and Balance Sheet
Operational cash flow reached $279 million, the second highest in RPM's history, allowing for debt reduction and shareholder returns.
SG&A Streamlining
SG&A as a percentage of sales declined due to structural reductions and efficiency improvements under MAP 2025.
Lowlights
Customer Bankruptcy Impact
A $4.4 million bad debt expense was incurred due to a customer bankruptcy in the consumer group, impacting adjusted EBIT.
Weather-Related Challenges
Severe winter weather conditions in the third quarter are expected to negatively impact DIY demand and some construction activity.
Challenging Macroeconomic Conditions in Europe
Despite profitability improvements, Europe remains a challenging market due to macroeconomic conditions.
FX Headwinds
Foreign exchange rates posed a headwind, particularly affecting sales in emerging markets.
Inflation Pressures
Pockets of raw material and labor inflation, especially in the consumer group, are expected to continue.
Company Guidance
During the RPM International Q2 2025 earnings call, the company reported record sales, adjusted EBIT margin, and adjusted EPS, despite facing a $4.4 million earnings headwind due to a customer bankruptcy. The adjusted EBIT margin reached a record 13.8%, with adjusted EPS increasing by 13.9% to $1.39. RPM's MAP 2025 initiatives played a significant role, contributing to a 7.7% growth in adjusted EBIT and enabling the company to reduce working capital as a percentage of sales by 100 basis points from the previous year. Cash flow from operations was strong at $279 million, the second-highest in the company's history. Despite the challenging macroeconomic environment and unfavorable weather conditions impacting some segments, RPM maintained its full-year sales growth outlook in the low single digits, with an adjusted EBIT growth range narrowed to 6% to 10%. The company anticipates continued MAP 2025 benefits and expects sales and earnings growth to resume in the fourth quarter.RPM International Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
RPM International Strengthens Board with New Appointments
Positive
Jan 17, 2025
On January 13, 2025, RPM International Inc. announced the appointment of Craig S. Morford, Christopher L. Mapes, and Julie A. Beck to its Board of Directors, with Mr. Morford and Mr. Mapes assuming their roles immediately while Ms. Beck will join in April. These appointments are aimed at strengthening the board’s expertise and leadership to drive long-term growth and shareholder value. Mr. Morford brings extensive legal and compliance experience, Mr. Mapes offers insights into manufacturing innovation and operational strategies, and Ms. Beck provides financial leadership expertise. These strategic additions are expected to enhance the company’s governance as it pursues its strategic priorities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.