Education
About Us
Working with TipRanks
Follow Us
RPM International (RPM)
NYSE:RPM
Top Page
RPM International
(NYSE:RPM)
Select Model
Select Model
Rating:71Outperform
Price Target:
$118.00
â–²(5.01% Upside)
RPM scores well overall primarily due to solid fundamentals (profitability and improved leverage) and a constructive, action-oriented earnings outlook (SG&A optimization and continued growth guidance). The score is held back by weaker free-cash-flow growth and mixed technical signals that don’t indicate strong near-term momentum, while valuation and dividend support a moderately positive view.
Positive Factors
Revenue and Gross Margin Resilience
Sustained revenue growth and consistently high gross margins (>41%) indicate durable pricing power and product mix strength across industrial, commercial and consumer end markets. This supports long-term profitability, reinvestment in R&D, and resilience against cyclical demand swings.
Low Leverage and High ROE
A markedly lower debt-to-equity ratio and robust 24% ROE provide financial flexibility for strategic M&A, capital returns, and investment programs while limiting interest expense sensitivity. This stronger balance sheet supports multi-quarter execution of growth and optimization plans.
Strong Operating Cash and Capital Returns
Consistent operating cash generation, robust liquidity and an established cadence of debt reduction and shareholder returns demonstrate durable cash conversion and capital allocation discipline, enabling continued acquisitions and dividends without sacrificing financial stability.
Negative Factors
Negative Free Cash Flow Growth
Negative FCF growth and modest OCF-to-net-income conversion suggest cash generation lags reported earnings, constraining self-funded investments and increasing reliance on financing or divestitures. Over several quarters this can limit strategic flexibility and pressure returns.
Margin Pressure from SG&A and Transition Costs
Ongoing plant/warehouse consolidations and shared-distribution start-ups have produced persistent conversion and transition inefficiencies and materially higher SG&A. With full SG&A savings not expected until FY27, margins face durable headwinds across multiple quarters.
Acquisition Integration and Dilution Risk
Aggressive small/overseas M&A has increased transaction and integration costs, producing near-term dilution and uncertain payback over an 18–24 month horizon. Earn-out reversals and modestly dilutive deals highlight execution risk and potential for slower-than-expected accretion.
RPM International (RPM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.24B
Dividend Yield1.96%
Average Volume (3M)1.16M
Price to Earnings (P/E)21.4
Beta (1Y)0.75
Revenue Growth3.09%
EPS Growth12.25%
CountryUS
Employees17,200
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.20
Shares Outstanding128,075,680
10 Day Avg. Volume1,514,099
30 Day Avg. Volume1,159,616
Financial Highlights & Ratios
PEG Ratio1.21
Price to Book (P/B)5.03
Price to Sales (P/S)1.97
P/FCF Ratio26.98
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue2.13
Enterprise Value/Gross Profit5.17
Enterprise Value/Ebitda14.56
Forecast
1Y Price Target
$125.92Price Target Upside12.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)5.29
Revenue Forecast (FY)$7.75B
RPM International Business Overview & Revenue Model
Company DescriptionRPM International Inc. manufactures, markets, and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It offers waterproofing, coating, and institutional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance services; sealing and bonding, subfloor preparation, flooring, and glazing solutions; resin flooring systems, polyurethane, MMA waterproof, epoxy floor paint and coatings, concrete repair, and protection products; solutions for fire stopping and intumescent steel coating, and manufacturing industry; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; insulated building cladding materials; and concrete form wall systems. It also provides polymer flooring systems; fiberglass reinforced plastic gratings and shapes; corrosion-control coating, containment and railcar lining, fire and sound proofing, and heat and cryogenic insulation products; specialty construction products; amine curing agents, reactive diluents, and epoxy resins; fluorescent colorants and pigments; shellac-based-specialty and marine coatings; fire and water damage restoration, carpet cleaning, and disinfecting products; fuel additives; wood treatments, and touch-up products; and nail enamels, polishes, and coating components. In addition, it offers paint contractors and the DIYers solutions, concrete restoration and flooring, metallic and faux finish coatings, cleaners, and hobby paints and cements; and caulk, sealant, adhesive, insulating foam, spackling, glazing, patch, and repair products. The company was incorporated in 1947 and is headquartered in Medina, Ohio.
How the Company Makes MoneyRPM International generates revenue primarily through the sale of its diverse range of products across various industries. The company operates through several segments, including the Industrial segment, which provides products for manufacturing and maintenance, the Consumer segment that focuses on DIY products, and the Specialty segment, which includes high-performance coatings and sealants for specific applications. Key revenue streams include direct sales to retail stores, distributors, and contractors, as well as e-commerce channels. Additionally, RPM benefits from strong brand recognition and customer loyalty, which are bolstered by strategic partnerships with retailers and contractors. The company also invests in innovation and product development, enabling it to capture new market opportunities and enhance its competitive edge.
RPM International Key Performance Indicators (KPIs)
RPM International Earnings Call Summary
Earnings Call Date:Nov 30, 2025
(Q2-2026)
| Next Earnings Date:Apr 08, 2026
Earnings Call Sentiment Neutral
The call presented a balanced view: the company delivered record sales, improved cash flow, strong liquidity, ongoing strategic acquisitions (including Kalzip) and announced a $100 million SG&A optimization plan to address elevated cost levels. However, profitability was pressured by higher SG&A, temporary conversion and consolidation inefficiencies, tariff-driven input cost pockets, higher interest expense and soft DIY demand (notably in November). Management provided near-term guidance calling for mid-single-digit sales growth and single-digit EBIT growth in coming quarters and plans to realize most cost savings by fiscal 2027. Given meaningful operational and margin challenges offset by strong cash generation, clear corrective actions, and strategic investments, the call is best characterized as balanced with cautious optimism.Q2-2026 Updates
Positive Updates
Record Consolidated Sales
Consolidated sales increased 3.5% year-over-year to a record in fiscal Q2 2026, driven by acquisitions and engineered solutions for high-performance buildings; all three segments reported positive sales growth and both Construction Products Group and Performance Coatings Group achieved record sales.
Strong Operating Cash Flow and Capital Returns
Cash flow from operations increased by $66.3 million in the quarter (second-highest Q2 in company history); the company paid down $127 million of debt in the first half, returned $169 million to shareholders (dividends and share repurchases), spent $162 million on acquisitions, and increased the dividend for the 52nd consecutive year; liquidity remains strong at $1.1 billion.
SG&A Optimization Plan Targeting $100 Million Annual Benefit
Management announced optimization actions expected to yield approximately $100 million of annual benefit once fully implemented (plan composed of roughly $70 million in personnel-related reductions and $30 million in discretionary cuts). Management realized $5 million of benefits in Q3, expects an incremental $20 million in Q4 and the remaining ~$75 million in fiscal 2027; full run-rate benefits expected to begin flowing in Q1 fiscal 2027.
Active M&A Pipeline and Strategic Acquisition (Kalzip)
Agreement to acquire Kalzip (German metal roofing/facades specialist with ~EUR 75 million calendar 2024 sales) to strengthen building envelope systems offering; acquisitions contributed to Europe being the fastest-growing region and are expected to expand capabilities and margins over time.
Backlogs and Segment Strength
Construction Products Group backlog continues to grow and Performance Coatings backlog is stable; North America sales grew approximately 2% in the quarter; December outperformance showed sales +12.1% and unit volumes +7%, indicating pockets of improving demand and conversion of delayed projects.
Focused Investments in Innovation and Business Intelligence
Continued investment in innovation (examples: AlphaGuard PUMA waterproofing, EucoTilt WB bond breaker) and business intelligence initiatives (leveraging The Pink Stuff data expertise and post-ERP integrations) to support targeted growth in high-performance buildings and improve pricing/marketing/operations.
Negative Updates
Decline in Margins, Adjusted EBIT and Adjusted EPS
Adjusted EBIT declined in the quarter as top-line gains were more than offset by higher SG&A, M&A deal costs and temporary inefficiencies; adjusted EPS declined driven by lower adjusted EBIT and higher interest expense from elevated debt levels used to finance acquisitions.
Higher SG&A and Temporary Inefficiencies
SG&A increased materially due to growth investments, M&A transaction costs and health care inflation; health care pressures were roughly $6–$7 million in the quarter and management noted higher SG&A growth in the first half (discussed as ~10% year-over-year in analyst Q&A), prompting the $100 million optimization program.
Facility Consolidations and Conversion Cost Headwinds
Temporary inefficiencies from plant and warehouse consolidations and new shared distribution center startup in Europe hurt results, with higher conversion costs reducing margins by almost 1 percentage point (management estimated this equates to roughly $20 million), plus an incremental $4–$5 million tied to facility transitions.
Consumer Volume Weakness and Soft DIY Demand
Consumer Group volumes declined due to persistent DIY softness, particularly in November; some sales were delayed by software implementations and the transition to a shared European distribution center; price realization was limited (price contribution <1% in Q2) and product rationalization also weighed on Consumer sales and margins.
Tariff-Driven Raw Material Inflation and Interest Costs
Although underlying raw material inflation is easing absent tariffs, pockets of tariff-driven inflation persist (metal packaging up low-teens, epoxy resins up high-single-digits and specific Asia-sourced niche items facing 20–50% tariff impacts); higher interest expense from increased debt levels reduced EPS.
Earn-Out Reversal for The Pink Stuff
Management reversed a $12.7 million earn-out liability related to The Pink Stuff acquisition because aggressive sales scenarios are now unlikely; the $12.7 million gain was excluded from adjusted EBIT, signaling the business is tracking to the base case rather than upside scenarios.
Near-Term Demand Volatility and Government Shutdown Impact
Momentum slowed as the quarter progressed with longer construction project lead times and DIY demand softening in late October and November; the government shutdown materially disrupted activity in government-funded construction sectors and consumer confidence, contributing to month-to-month volatility (strong September, weak Oct–Nov, strong December).
Short-Term Dilution from Recent Acquisitions
Recent small and overseas acquisitions produced higher transaction and integration costs that were dilutive to margins in the near term (management noted many deals carry relatively high transaction costs and have been modestly dilutive in fiscal '26), with expected accretion over an 18–24 month integration horizon.
Company Guidance
RPM guided Q3 consolidated sales to increase mid‑single digits with adjusted EBIT growing mid‑ to high‑single digits, and Q4 sales to rise mid‑single digits with adjusted EBIT up low‑ to high‑single digits, noting markets should remain sluggish (soft DIY, longer construction lead times) but that the company expects to outgrow underlying markets. Management reiterated a $100M annual SG&A optimization (realized $5M in Q3, +$20M incremental in Q4, remaining $75M in fiscal 2027), will report implementation costs by April and expects full benefit beginning FY27/Q1 (executing at roughly a $25M/quarter run rate), and highlighted Q2 metrics including record sales +3.5%, adjusted EBIT and EPS declines, cash flow from operations +$66.3M, liquidity $1.1B, $127M debt paid in H1, $169M returned to shareholders, $162M spent on acquisitions, a €75M‑sales Kalzip deal expected to close in fiscal Q4 2026, plus a ~1ppt (~$20M) margin hit from conversion/transition costs, $6–7M of higher health‑care costs and price realization of <1% in Q2.RPM International Financial Statement Overview
Summary
Strong profitability and returns (TTM gross margin ~41%, operating margin ~11.8%, ROE ~23%) support the score. Offsetting factors are moderate leverage (debt-to-equity ~0.92) and historically uneven cash-flow conversion, despite positive TTM free cash flow (~$583M).Income Statement
RPM shows solid profitability and improving operating performance. In TTM (Trailing-Twelve-Months), gross margin is ~41% and net margin is ~8.8%, with operating margin around ~11.8%—healthy for a specialty chemicals profile. Revenue has been relatively steady across recent annual periods, while profits have expanded meaningfully versus FY2023–FY2024 levels. The main weakness is that the latest revenue growth signal looks unusually high versus the otherwise modest multi-year trend, suggesting potential volatility or a one-time uplift rather than consistent acceleration.85
Very Positive
Balance Sheet
The balance sheet is workable but moderately leveraged. TTM (Trailing-Twelve-Months) debt is about $2.87B against equity of ~$3.13B (debt-to-equity ~0.92), improved from the higher leverage seen in FY2022–FY2023. Returns on equity remain strong (TTM ~23%), indicating effective use of capital. The key risk is that leverage is still meaningful for a cyclical/industrial-leaning business, and prior years show the company has operated with higher debt-to-equity, which can reduce flexibility if demand softens.78
Positive
Cash Flow
Cash generation is positive but somewhat inconsistent year-to-year. TTM (Trailing-Twelve-Months) operating cash flow is ~$824M and free cash flow is ~$583M, with free cash flow running at ~71% of net income—reasonable quality of earnings. However, cash conversion has been volatile historically (including a year with negative free cash flow in FY2022), and operating cash flow as a share of sales remains modest, which suggests working-capital swings can materially impact cash results.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.37B | 7.34B | 7.26B | 6.71B | 6.11B |
| Gross Profit | 3.05B | 3.01B | 2.75B | 2.41B | 2.41B |
| EBITDA | 1.08B | 1.08B | 923.35M | 844.53M | 897.32M |
| Net Income | 688.69M | 588.40M | 478.69M | 491.48M | 502.64M |
Balance Sheet | |||||
| Total Assets | 7.78B | 6.59B | 6.78B | 6.71B | 6.25B |
| Cash, Cash Equivalents and Short-Term Investments | 302.14M | 237.38M | 215.79M | 201.67M | 246.70M |
| Total Debt | 2.96B | 2.41B | 2.97B | 2.95B | 2.64B |
| Total Liabilities | 4.89B | 4.07B | 4.64B | 4.72B | 4.51B |
| Stockholders Equity | 2.89B | 2.51B | 2.14B | 1.98B | 1.74B |
Cash Flow | |||||
| Free Cash Flow | 538.26M | 908.34M | 322.67M | -43.67M | 608.96M |
| Operating Cash Flow | 768.19M | 1.12B | 577.11M | 178.73M | 766.16M |
| Investing Cash Flow | -825.53M | -206.44M | -249.70M | -259.55M | -326.39M |
| Financing Cash Flow | 121.94M | -890.03M | -301.16M | 57.39M | -459.62M |
RPM International Technical Analysis
Positive
112.37
Price Trends
106.37
Positive
111.97
Positive
111.96
Positive
Market Momentum
1.34
Negative
65.78
Neutral
87.97
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPM, the sentiment is Positive. The current price of 112.37 is above the 20-day moving average (MA) of 107.17, above the 50-day MA of 106.37, and above the 200-day MA of 111.96, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 65.78 is Neutral, neither overbought nor oversold. The STOCH value of 87.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $7.90B | 11.55 | 12.24% | 5.33% | -3.33% | -19.59% | |
71 Outperform | $14.24B | 21.41 | 22.72% | 1.96% | 3.09% | 12.25% | |
67 Neutral | $24.36B | 19.38 | 16.31% | 2.71% | -12.98% | -11.34% | |
65 Neutral | $6.80B | 28.47 | 9.40% | 1.25% | 3.87% | -10.30% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $17.97B | -43.74 | -2.84% | 2.41% | -3.01% | 82.30% | |
56 Neutral | $11.53B | -11.89 | -9.48% | 2.88% | -5.32% | -1108.29% |
* Basic Materials Sector Average
RPM
RPM International
112.37
-11.76
-9.47%
EMN
Eastman Chemical
70.23
-17.46
-19.91%
IFF
International Flavors & Fragrances
70.83
-11.68
-14.16%
PPG
PPG Industries
110.07
-6.45
-5.54%
WLK
Westlake Corporation
88.30
-26.31
-22.96%
ESI
Element Solutions
29.38
3.96
15.58%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.