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	116.94
Change Percentage	1.61%
Open	116.3
Previous Close	115.09
Market Cap ( Millions)	14977
Volume	1193135
Year High	129.12
Year Low	95.28
M A 50	107.72
M A 200	112.87

FCF Yield	3.89%
Dividend Yield	1.80%
ROE	22.70%
Debt / Equity	91.65%
Net Debt / EBIDTA	230.03%
Price To Book	4.75
Price Earnings Ratio	22.32
Price To FCF	25.69
Price To sales	1.98
EV / EBITDA	15.8

2. RPM International's Q2 Earnings: A Mixed Bag

RPM International achieved record sales of $1.83 billion in the second quarter, a 3.5% increase, but adjusted EBIT declined due to higher SG&A expenses from growth initiatives, M&A deal costs, and temporary inefficiencies. The company's EPS came in at $1.2, missing estimates of $1.41. The revenue growth was driven by targeted growth investments, but momentum slowed due to longer construction project lead times, soft DIY demand, and a government shutdown.

Publication Date: Jan -09

                                    📋 Highlights
                                    Record Q2 Sales Growth::
                                                Consolidated sales rose 3.5% to a record, driven by targeted investments, but momentum slowed due to construction delays, soft DIY demand, and a government shutdown.
SG&A Cost Optimization::
                                                Actions to reduce SG&A expenses are projected to yield $100M annual savings, with $5M realized in Q3 and $20M in Q4, offsetting growth-related costs.
Regional Growth Disparities::
                                                Europe led with M&A/ FX-driven growth, North America grew 2%, while emerging markets (Africa/Middle East) expanded due to strategic investments.
Segment Performance::
                                                Construction Products Group achieved record sales but saw EBIT decline from SG&A investments; Performance Coatings Group posted broad-based sales growth.
Kalzip Acquisition Impact::
                                                Acquisition of Kalzip (€75M in sales) expected to close in Q4 2026, with Q3-Q4 sales growth driven by organic gains and upcoming acquisitions.

                                

Segment-wise Performance

The Construction Products Group achieved record sales, but adjusted EBIT declined due to SG&A growth investments and temporary inefficiencies. The Performance Coatings Group achieved record sales with broad-based growth, while the Consumer Group's sales grew driven by M&A and pricing, but adjusted EBIT declined due to lower volumes and temporary inefficiencies.

Geographic Performance

Europe was the fastest-growing region, driven by M&A and FX, while North America grew approximately 2% and emerging markets grew led by Africa and the Middle East. The company's geographic diversification helped mitigate the impact of the government shutdown.

Outlook and Guidance

The company expects consolidated sales to increase by mid-single digits in the third quarter and mid-single-digit range in the fourth quarter, with adjusted EBIT growth of mid- to high single digits in the third quarter and low to high single digits in the fourth quarter. Analysts estimate next year's revenue growth at 3.5%.

Valuation and Metrics

With a P/E Ratio of 20.34, P/B Ratio of 4.33, and EV/EBITDA of 14.73, the company's valuation multiples indicate a premium. The company's ROIC is 11.76%, and ROE is 22.7%, indicating a strong return on equity. The Net Debt / EBITDA ratio is 2.32, indicating a manageable debt level.

Acquisition and Strategic Plans

The company announced an agreement to acquire Kalzip, a German-based leader in metal-based roofing and facades, for approximately EUR 75 million in sales. The acquisition is expected to close in the fourth quarter of 2026. The company is undergoing an SG&A structural realignment, with a goal to reduce costs and reallocate resources to growth areas.

Challenges and Opportunities

3. NewsRoom

New Strong Sell Stocks for January 26th

Jan -26

Source: zacks.com

Timothy Kinser Sells 3,441 Shares of RPM International (NYSE:RPM) Stock

Jan -24

Source: defenseworld.net

Fairway Wealth LLC Raises Holdings in RPM International Inc. $RPM

Jan -22

Source: defenseworld.net

RPM International (RPM) International Revenue Performance Explored

Jan -12

Source: zacks.com

RPM International: A Solid Q2 Makes It A Buy (Rating Upgrade)

Jan -09

Source: seekingalpha.com

RPM Q2 Earnings & Sales Miss Estimates, Adjusted EBIT Down Y/Y

Jan -09

Source: zacks.com

RPM International Inc. (RPM) Q2 2026 Earnings Call Transcript

Jan -08

Source: seekingalpha.com

RPM Strengthens Building Envelope Platform With Kalzip Acquisition

Jan -08

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: 5.4/10

Value: 6.9

Growth: 6.4

Quality: 5.7

Yield: 5.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

RPM International

A-Score: 5.3/10

Value: 3.8

Growth: 6.3

Quality: 5.8

Yield: 4.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

Balchem

A-Score: 4.9/10

Value: 1.9

Growth: 5.4

Quality: 7.5

Yield: 1.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

Innospec

A-Score: 4.5/10

Value: 5.0

Growth: 4.1

Quality: 4.8

Yield: 3.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

Olin

A-Score: 4.1/10

Value: 7.1

Growth: 4.3

Quality: 2.4

Yield: 6.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

Westlake

A-Score: 4.1/10

Value: 7.7

Growth: 4.0

Quality: 3.3

Yield: 4.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.43%

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 Q2 Earnings: A Mixed Bag

Segment-wise Performance

Geographic Performance

Outlook and Guidance

Valuation and Metrics

Acquisition and Strategic Plans

Challenges and Opportunities

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

116.94$

Current Price

116.94$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA