Evercore ISI on RPM International (RPM): 'December Calms the Tape'

Evercore ISI analyst Stephen Richardson reiterated an Outperform rating and $125.00 price target on RPM International (NYSE: RPM).

The analyst comments "RPM rallied 800 bps intra-call on the surprise disclosure that Dec sales grew 12% y/y – a sharp contrast with underwhelming F3Q (DecFeb) sales guidance for +MSD total sales growth. With acquisitions a +4% contribution to F3Q sales and FX a +2% tailwind, we infer Dec posted a promising +6% organic growth. Put differently, Dec disclosure implies Jan/Feb organic sales could contract by 3% and RPM would still achieve +MSD F3Q sales (see Fig 2 within). One month is far from an ‘all clear’, but is enough to suggest softness in F2Q’s Oct/Nov (shutdown-influenced, plus softer DIY) need not be extrapolated across balance of the fiscal year. From here, debate shifts toward what ultimately determines rerating: (1) whether Dec reflects true underlying demand vs shutdown recovery and easy comps; (2) whether Consumer can stabilize amid weak POS trends and retailer inventory discipline, with ERP/DC disruptions framed as temporary and Pink Stuff expectations now more conservatively set; and (3) how quickly the $100mm G&A pull-forward converts into incremental margin vs muting perceived upside from a summer unveiling of MAP 3.0. Valuation skew remains attractive. RPM trades near the 15th percentile on a 3yr EV/EBITDA (ntm) lookback, with expectations now reset, and even modest volume recovery set to unlock operating leverage. The stock last traded at comparable levels following the March tariff dislocation and during the 2023 destocking cycle – both periods proved attractive entry points."

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 $106.61 yesterday.

You May Also Be Interested In

• Bernstein SocGen Group Starts Terawulf Inc. (WULF) at Outperform
• SpaceX files for 555.56M share IPO at $135/sh
• RBC Capital on Veeva Systems (VEEV) Amid After Hours Selloff on Earnings: 'we are surprised to see shares trade down'