RPM International Inc. (RPM) | Investment Case

1. Company Snapshot

1.a. Company Description

RPM 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.

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1.b. Last Insights on RPM

RPM International's recent performance was driven by a strong Q4 earnings beat, with earnings per share of $1.72 surpassing the Zacks Consensus Estimate of $1.6. The company's revenue also exceeded expectations, with a record fiscal 2025 fourth-quarter and full-year results. Additionally, RPM's strategic acquisition of Ready Seal Inc. expanded its Rust-Oleum business, aiming to boost sales and sharpen its competitive edge. Furthermore, the company's international revenue performance has been a key driver, with analysts on Wall Street taking note of its growth prospects.

1.c. Company Highlights

Last Price	105.3
Change Percentage	0.29%
Open	105.12
Previous Close	105
Market Cap ( Millions)	13501
Volume	759880
Year High	137.87
Year Low	95.28
M A 50	109.7
M A 200	114.18

FCF Yield	3.82%
Dividend Yield	1.97%
ROE	24.31%
Debt / Equity	98.52%
Net Debt / EBIDTA	246.41%
Price To Book	4.39
Price Earnings Ratio	19.46
Price To FCF	26.17
Price To sales	1.8
EV / EBITDA	14.73

2. RPM International's Fiscal 2026 First Quarter Earnings: A Strong Start

RPM International reported a record quarterly sales performance, with consolidated sales increasing 7.4% to a new high, driven by both organic growth and strategic acquisitions. Adjusted EBIT also rose 2.9% to a record, thanks to sales growth and benefits from the MAP 2025 initiative, which offset headwinds from higher raw material costs and temporary cost inefficiencies. The company's actual EPS came out at $1.88, slightly beating estimates of $1.87.

Publication Date: Oct -26

                                    📋 Highlights
                                    Record Quarterly Sales & Adjusted EBIT::
                                                RPM reported 7.4% sales growth to a record $1.3B and 2.9% adjusted EBIT increase to $185M, driven by organic growth, acquisitions, and MAP 2025 benefits.
Construction & Performance Coatings Outperform::
                                                Both groups achieved record sales and EBIT, with construction driven by roofing solutions and performance coatings by turnkey flooring and specialty OEM.
Q2 Guidance & Full-Year Outlook::
                                                Anticipates mid-single-digit Q2 sales/EBIT growth, full-year sales growth at the high end of low-to-mid-single-digits, and EBIT growth toward the lower end of high single-to-low double-digits.
Strategic Investments & SG&A Growth::
                                                $10M+ allocated to salesforce expansion, advertising, and M&A, with SG&A expected to rise due to healthcare costs ($8.8M increase) and growth initiatives.
Balance Sheet Strength & Shareholder Returns::
                                                Maintains $933M liquidity and a healthy 1.8x debt/EBITDA ratio, returning $82M to shareholders via dividends and buybacks in Q1.

                                

Segment Performance

The Construction Products Group achieved record sales and adjusted EBIT, driven by systems and turnkey roofing solutions. The Performance Coatings Group also achieved record sales and adjusted EBIT, driven by broad-based strength in turnkey flooring, protective coatings, and specialty OEM. The Consumer Group saw record sales due to the successful integration of the Pink Stuff and Ready Seal acquisitions.

Guidance and Outlook

RPM expects another quarter of record sales and adjusted EBIT in Q2, led by systems and turnkey solutions serving construction projects. For the full year, RPM expects sales to be at the high end of its previously announced low single to mid-single-digit growth range, with adjusted EBIT growth toward the lower end of its previously announced outlook of high single-digit to low double-digit growth.

Valuation and Financial Health

With a P/E Ratio of 20.61 and an EV/EBITDA of 15.45, RPM's valuation suggests that the market is pricing in a certain level of growth. The company's healthy balance sheet, with low leverage ratios and liquidity of $933 million, supports its ability to continue making strategic acquisitions and investing in growth initiatives. The ROIC of 12.04% and ROE of 24.31% indicate a strong return on investment.

Growth Initiatives and Challenges

The company has taken actions to address profitability headwinds, including SG&A streamlining and pricing actions to recover the impact of inflation. Investments in growth initiatives, such as additional spending on new hires in sales and sales associate areas, are delivering desired outcomes. However, the company faced an $8.8 million increase in healthcare costs and is dealing with the impact of tariffs, with an estimated $90 million to $95 million unmitigated impact.

M&A Activity and Future Plans

RPM has been active on the M&A front, with $600 million spent in the last five months on acquisitions, including Ready Seal and Pink Stuff. The company has a strong balance sheet, with a debt-to-EBITDA ratio of 1.8 times, and is well-positioned to continue making strategic acquisitions. Analysts estimate next year's revenue growth at 6.8%, which is slightly above the company's expected growth range.

3. NewsRoom

RPM to Announce Fiscal 2026 Second-Quarter Results on January 8, 2026

Dec -05

Source: businesswire.com

First Atlantic Nickel Expands Phase 2X Drilling at Pipestone XL Nickel Alloy Project: Four Additional Holes Targeting 1.4 Kilometer Strike Length and 850-Meter Width at RPM Zone

Dec -04

Source: globenewswire.com

First Atlantic Nickel Phase 2X Drilling Expands Lateral Width of Awaruite Nickel Alloy Mineralization Along Sections S1 and S3 at RPM Zone Within Newly Expanded 4-Kilometer Target

Nov -03

Source: globenewswire.com

Head to Head Review: DAQO New Energy (NYSE:DQ) and RPM International (NYSE:RPM)

Oct -31

Source: defenseworld.net

RPM International (NYSE:RPM) vs. Ecovyst (NYSE:ECVT) Financial Review

Oct -24

Source: defenseworld.net

First Atlantic Nickel Announces Expanded 4-Kilometer Strike Length at RPM Zone from DTR Surface Sampling at Pipestone XL Nickel Alloy Project

Oct -21

Source: globenewswire.com

SYIEY or RPM: Which Is the Better Value Stock Right Now?

Oct -06

Source: zacks.com

Interpreting RPM International (RPM) International Revenue Trends

Oct -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.70%)

6. Segments

Construction Products

Expected Growth: 2.5%

RPM International Inc.'s Construction Products segment growth of 2.5% is driven by increasing demand for repair and maintenance activities, growth in commercial construction, and rising infrastructure spending. Additionally, the company's focus on innovative products and strategic acquisitions contribute to its growth momentum.

Consumer

Expected Growth: 2.8%

RPM International Inc.'s Consumer segment growth of 2.8% is driven by increasing demand for DIY and home improvement projects, fueled by a strong housing market and rising consumer confidence. Additionally, the company's focus on innovative products and strategic acquisitions has expanded its market share, contributing to the segment's growth.

Performance Coatings

Expected Growth: 3.2%

RPM International Inc.'s Performance Coatings segment growth of 3.2% is driven by increasing demand for protective coatings in the energy and infrastructure markets, as well as the company's strategic acquisitions and investments in innovative products and technologies, such as epoxy and polyurethane coatings.

Specialty Products

Expected Growth: 2.2%

RPM International Inc.'s Specialty Products segment growth of 2.2% is driven by increasing demand for protective coatings and sealants in the construction industry, as well as the company's strategic acquisitions and expansion into new markets, such as the aerospace and energy industries.

7. Detailed Products

Rust-Oleum

Rust-Oleum is a leading brand of rust-preventive coatings, paint, and varnish. It offers a wide range of products for industrial, commercial, and consumer applications.

Zinsser

Zinsser is a leading brand of high-performance coatings for the professional contractor and DIY markets. It offers a range of products for interior and exterior applications.

Varathane

Varathane is a leading brand of wood finishes and coatings for the woodworking industry. It offers a range of products for staining, sealing, and protecting wood surfaces.

Day-Glo

Day-Glo is a leading brand of fluorescent pigments and coatings for the industrial, commercial, and consumer markets. It offers a range of products for safety, signage, and decorative applications.

Stonhard

Stonhard is a leading brand of high-performance flooring and wall systems for industrial, commercial, and institutional applications.

Carboline

Carboline is a leading brand of high-performance coatings and linings for the industrial market. It offers a range of products for corrosion protection, fireproofing, and insulation.

RPM Wood Finishes Group

RPM Wood Finishes Group is a leading manufacturer of wood finishes and coatings for the woodworking industry.

8. RPM International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

RPM International Inc. operates in a industry where substitutes are available, but they are not a significant threat to the company's business. The company's products are specialized and have a strong brand reputation, making it difficult for substitutes to gain traction.

Bargaining Power Of Customers

RPM International Inc. has a diverse customer base, which reduces the bargaining power of individual customers. The company's products are also specialized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

RPM International Inc. relies on a network of suppliers to provide raw materials and components. While the company has some bargaining power due to its size, suppliers also have some leverage due to the specialized nature of the products.

Threat Of New Entrants

The coatings and sealants industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to gain a foothold in the market.

Intensity Of Rivalry

The coatings and sealants industry is highly competitive, with several established players competing for market share. RPM International Inc. faces intense competition from companies such as PPG Industries and Sherwin-Williams.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	58.11%
Debt Cost	5.43%
Equity Weight	41.89%
Equity Cost	9.19%
WACC	7.00%
Leverage	138.70%

11. Quality Control: RPM International Inc. passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Cabot

A-Score: 5.5/10

Value: 7.1

Growth: 6.4

Quality: 6.0

Yield: 5.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

RPM International

A-Score: 5.2/10

Value: 3.6

Growth: 6.6

Quality: 5.7

Yield: 4.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

Balchem

A-Score: 4.7/10

Value: 1.9

Growth: 5.6

Quality: 7.5

Yield: 1.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

Innospec

A-Score: 4.3/10

Value: 3.4

Growth: 4.1

Quality: 5.4

Yield: 3.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

Westlake

A-Score: 4.0/10

Value: 7.8

Growth: 4.0

Quality: 3.5

Yield: 4.0

Momentum: 0.0

Volatility: 5.0

1-Year Total Return ->

Olin

A-Score: 3.7/10

Value: 5.5

Growth: 4.4

Quality: 2.0

Yield: 6.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.08%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.00%

RPM International Inc. - US7496851038

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RPM

1.c. Company Highlights

Less Volatile

Expensive

Better Quality

Earnings Beats

Average Quality

Revenues Miss

Revenues Beats

Stable Momentum

Earnings Miss

Fairly Valued

Average Yield

Average Growth

2. RPM International's Fiscal 2026 First Quarter Earnings: A Strong Start

Segment Performance

Guidance and Outlook

Valuation and Financial Health

Growth Initiatives and Challenges

M&A Activity and Future Plans

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.70%)

6. Segments

Construction Products

Expected Growth: 2.5%

Consumer

Expected Growth: 2.8%

Performance Coatings

Expected Growth: 3.2%

Specialty Products

Expected Growth: 2.2%

7. Detailed Products

Rust-Oleum

Zinsser

Varathane

Day-Glo

Stonhard

Carboline

RPM Wood Finishes Group

8. RPM International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: RPM International Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

105.3$

Current Price

105.3$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA