RBC Capital: 'we expect a negative stock reaction today in RPM and coatings peers SHW, PPG, and AXTA'

RBC Capital analyst Arun Viswanathan reiterated an Outperform rating and $132.00 price target on RPM International (NYSE: RPM).

The analyst comments "Maintain Outperform. As we previewed yesterday, RPM missed FQ2 results on impacts from the gov’t shutdown and increased SG&A costs. Overall, we expect RPM to see a negative reaction today given the FQ2 EBIT miss of $227M (vs our/Street $260M/ $265M), FQ2 EPS miss of $1.20 (vs RBC/Street $1.35/$1.41), and a FQ3 EBIT guide of +msd-hsd% y/y, implying ~$84M vs RBC/ consensus $107M/$108M. For FQ4 , RPM expects +msd% sales and +lsd-hsd% adj EBIT, implying FQ4 adj EBIT of $330M vs RBC/Street $351M/$343M and FY26 adj EBIT of $978M vs RBC/Street $1.056B/$1.052B (lower than its prior $1.064B guide at the lower end of +hsd-ldd % adj EBIT). That said, RPM is now implementing SG&A optimization actions that are expected to save $100M annually once fully implemented ($5M FQ3/incremental $20M FQ4/incremental $75M FY27), and the company will announce further details in April 2026. Therefore, despite the FQ2/26 miss, we still see a path to our $1.16B/$6.35 EBIT/EPS forecasts for FY27. Given RPM's miss and below-Street FQ3/FQ4/implied FY26 guide, we expect a negative stock reaction today in RPM and coatings peers SHW, PPG, and AXTA ."

For an analyst ratings summary and ratings history on RPM International click here. For more ratings news on RPM International click here.

Shares of RPM International closed at $104.82 yesterday.

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