RPM International Reports Q2 Sales Miss, Stock Rises on Acquisition News
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 08 2025
0mins
Should l Buy RPM?
Source: Yahoo Finance
RPM International Inc. saw a price increase of 3.61%, reaching a 20-day high amid positive market conditions, with the Nasdaq-100 up 0.60% and the S&P 500 up 0.39%.
The stock's rise is attributed to RPM's strategic acquisition of Kalzip GmbH, a German company specializing in building envelope technologies, which is expected to enhance RPM's competitive edge and drive future sales growth. This acquisition aligns with RPM's strategy to solidify its leadership in high-growth construction markets, despite recent disappointing sales performance and declining profitability in their Q2 report.
The implications of this acquisition could be significant for RPM, as it not only expands their product offerings but also positions them to better meet the growing demand for high-performance building materials. Investors may view this move as a positive step towards long-term growth, even as the company navigates current market challenges.
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Analyst Views on RPM
Wall Street analysts forecast RPM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RPM is 126.00 USD with a low forecast of 115.00 USD and a high forecast of 149.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
9 Buy
2 Hold
0 Sell
Strong Buy
Current: 115.090
Low
115.00
Averages
126.00
High
149.00
Current: 115.090
Low
115.00
Averages
126.00
High
149.00
About RPM
RPM International Inc. owns subsidiaries that specialize in coatings, sealants, building materials and related services. Its segments include Construction Products Group (CPG), Performance Coatings Group (PCG), and Consumer. The CPG segment products and services are sold throughout North America and also account for a significant portion of its international sales. Its products and services within this segment include construction sealants and adhesives, coatings and chemicals, roofing installation, HVAC and roofing restoration, concrete admixture and repair products, and others. The PCG segment offers products and services including high-performance flooring solutions, corrosion control and fireproofing coatings, infrastructure repair systems and fiberglass reinforced plastic structures. The Consumer segment manufactures and markets professional use and do-it-yourself products for a variety of mainly residential applications, including home improvement and personal leisure activities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
RPM (RPM) Q2 2026 Earnings Call Transcript
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Materials Companies Face EPS Downgrades, PKG Rated Lowest
- Earnings Downgrades: As earnings season approaches, analysts have broadly downgraded earnings expectations for materials companies, with Packaging Corporation of America (PKG) rated the lowest, indicating a lack of market confidence in its near-term performance.
- Rating Distribution: Among large-cap materials firms, FRPM International (RPM) and PPG Industries (PPG) received grades of D- and D respectively, suggesting a pessimistic outlook from analysts that could impact investor sentiment.
- Industry Trends: Overall, International Paper (IP) and POSCO Holdings (PKX) both received D grades, reflecting the challenges faced by the materials sector in the current economic climate, potentially leading to capital outflows.
- Market Performance: While the materials sector is expected to outperform the energy sector in 2026, the current earnings downgrades may affect short-term investment decisions, particularly among companies with weaker earnings momentum.
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RPM International Shares Rise Over 4% Following JPMorgan Upgrade
- Stock Price Surge: RPM International shares rose over 4% in recent trading, indicating a positive market sentiment towards the company's future performance and reflecting increased investor confidence in its fundamentals.
- Upgrade Impact: JPMorgan's upgrade of RPM International signals analysts' optimism regarding the company's future profitability, which may attract more investor interest and further drive up the stock price.
- Positive Market Reaction: The stock price increase demonstrates a favorable market response to RPM International, potentially enhancing the company's capital-raising capabilities in the market to support future expansion plans.
- Increased Investor Confidence: With the rating upgrade, investor confidence in RPM International has significantly strengthened, which not only helps elevate the company's standing in the industry but may also attract more institutional investor attention.
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- Content Strategy: Goldman emphasizes that Netflix will continue to rely on original and returning original content to drive user engagement and growth, a strategy that may impact user retention and market share in the competitive streaming landscape.
- Market Expectations: While Goldman maintains a neutral rating on Netflix, the market's reaction to the forthcoming earnings report could lead to stock price volatility, particularly given the uncertainties in the macroeconomic environment.
- Competitive Pressure: Netflix faces competitive pressures from other streaming platforms, especially regarding content richness and user experience, which could affect its growth potential moving forward.
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RPM International Reports $1.91B Q2 Sales, Misses Expectations
- Disappointing Sales Performance: RPM International reported $1.91 billion in sales for Q2, a 3.5% year-over-year increase, yet fell short of the $1.928 billion estimate, indicating signs of weak market demand.
- Declining Profitability: Adjusted EBIT decreased by 11.2% year-over-year to $226.6 million, primarily due to growth investments and lower fixed-cost absorption, reflecting the company's profitability pressures in the current market environment.
- Shareholder Returns: In the first six months of fiscal 2026, the company returned $168.7 million to shareholders through dividends and share repurchases, demonstrating a commitment to shareholders despite declining earnings.
- Cautious Future Outlook: RPM anticipates mid-single-digit sales growth for Q3, and while market demand remains sluggish, management expresses optimism about future construction projects and plans to implement approximately $100 million in SG&A optimization measures to address market challenges.
See More
RPM International Reports 3.5% Revenue Growth but Earnings Drop in Q2
- Revenue Growth: RPM International's Q2 revenue reached $1.909 billion, a 3.5% increase from $1.845 billion last year, indicating the company's stability and growth potential in the market.
- Earnings Decline: Despite the revenue increase, net income fell to $161.20 million, with earnings per share at $1.26, down from $183.20 million and $1.42 per share last year, reflecting cost pressures and intensified market competition.
- Adjusted Earnings: Excluding non-recurring items, RPM reported adjusted earnings of $1.20 per share, demonstrating the company's efforts in controlling operational costs, yet still unable to offset the overall decline in profitability.
- Market Outlook: Although facing profitability challenges, RPM's revenue growth may provide funding for future investments and market expansion, particularly against the backdrop of sustained demand in the construction and coatings industry.
See More
RPM (RPM) Q2 2026 Earnings Call Transcript
See More
Materials Companies Face EPS Downgrades, PKG Rated Lowest
- Earnings Downgrades: As earnings season approaches, analysts have broadly downgraded earnings expectations for materials companies, with Packaging Corporation of America (PKG) rated the lowest, indicating a lack of market confidence in its near-term performance.
- Rating Distribution: Among large-cap materials firms, FRPM International (RPM) and PPG Industries (PPG) received grades of D- and D respectively, suggesting a pessimistic outlook from analysts that could impact investor sentiment.
- Industry Trends: Overall, International Paper (IP) and POSCO Holdings (PKX) both received D grades, reflecting the challenges faced by the materials sector in the current economic climate, potentially leading to capital outflows.
- Market Performance: While the materials sector is expected to outperform the energy sector in 2026, the current earnings downgrades may affect short-term investment decisions, particularly among companies with weaker earnings momentum.
See More
RPM International Shares Rise Over 4% Following JPMorgan Upgrade
- Stock Price Surge: RPM International shares rose over 4% in recent trading, indicating a positive market sentiment towards the company's future performance and reflecting increased investor confidence in its fundamentals.
- Upgrade Impact: JPMorgan's upgrade of RPM International signals analysts' optimism regarding the company's future profitability, which may attract more investor interest and further drive up the stock price.
- Positive Market Reaction: The stock price increase demonstrates a favorable market response to RPM International, potentially enhancing the company's capital-raising capabilities in the market to support future expansion plans.
- Increased Investor Confidence: With the rating upgrade, investor confidence in RPM International has significantly strengthened, which not only helps elevate the company's standing in the industry but may also attract more institutional investor attention.
See More
Goldman Sachs Cuts Netflix Price Target to $112 Ahead of Earnings
- Price Target Adjustment: Goldman Sachs has cut its price target for Netflix from $130 to $112, reflecting a cautious outlook ahead of the upcoming earnings report, which is expected to show solid performance by the end of 2025 as management executes its core strategic focus.
- Content Strategy: Goldman emphasizes that Netflix will continue to rely on original and returning original content to drive user engagement and growth, a strategy that may impact user retention and market share in the competitive streaming landscape.
- Market Expectations: While Goldman maintains a neutral rating on Netflix, the market's reaction to the forthcoming earnings report could lead to stock price volatility, particularly given the uncertainties in the macroeconomic environment.
- Competitive Pressure: Netflix faces competitive pressures from other streaming platforms, especially regarding content richness and user experience, which could affect its growth potential moving forward.
See More
RPM International Reports $1.91B Q2 Sales, Misses Expectations
- Disappointing Sales Performance: RPM International reported $1.91 billion in sales for Q2, a 3.5% year-over-year increase, yet fell short of the $1.928 billion estimate, indicating signs of weak market demand.
- Declining Profitability: Adjusted EBIT decreased by 11.2% year-over-year to $226.6 million, primarily due to growth investments and lower fixed-cost absorption, reflecting the company's profitability pressures in the current market environment.
- Shareholder Returns: In the first six months of fiscal 2026, the company returned $168.7 million to shareholders through dividends and share repurchases, demonstrating a commitment to shareholders despite declining earnings.
- Cautious Future Outlook: RPM anticipates mid-single-digit sales growth for Q3, and while market demand remains sluggish, management expresses optimism about future construction projects and plans to implement approximately $100 million in SG&A optimization measures to address market challenges.
See More
RPM International Reports 3.5% Revenue Growth but Earnings Drop in Q2
- Revenue Growth: RPM International's Q2 revenue reached $1.909 billion, a 3.5% increase from $1.845 billion last year, indicating the company's stability and growth potential in the market.
- Earnings Decline: Despite the revenue increase, net income fell to $161.20 million, with earnings per share at $1.26, down from $183.20 million and $1.42 per share last year, reflecting cost pressures and intensified market competition.
- Adjusted Earnings: Excluding non-recurring items, RPM reported adjusted earnings of $1.20 per share, demonstrating the company's efforts in controlling operational costs, yet still unable to offset the overall decline in profitability.
- Market Outlook: Although facing profitability challenges, RPM's revenue growth may provide funding for future investments and market expansion, particularly against the backdrop of sustained demand in the construction and coatings industry.
See More
