RPM International (RPM) Up 5.3% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for RPM International (RPM). Shares have added about 5.3% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is RPM International due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for RPM International Inc. before we dive into how investors and analysts have reacted as of late.

RPM International Q4 Earnings & Sales Beat, Both Up Y/Y

RPM International reported strong fourth-quarter fiscal 2026 results, with adjusted earnings and net sales topping the Zacks Consensus Estimate and increasing on a year-over-year basis.

The quarterly results were driven by increased demand for engineered solutions for high-performance buildings and infrastructure projects, acquisitions, positive pricing and favorable foreign currency translation. These tailwinds were partly offset by soft demand in do-it-yourself markets.

Inside RPM International’s Headlines

The company’s adjusted earnings per share of $1.89 topped the Zacks Consensus Estimate of $1.84 by 2.7%. In the prior-year quarter, RPM reported adjusted earnings of $1.72 per share.

Net sales of $2.23 billion also surpassed the consensus mark of $2.19 billion by 2.1% and increased 7.2% year over year. Net sales rose 2.5% organically during the quarter year over year. Acquisitions net of divestitures and favorable foreign currency translation aided sales by 3.5% and 1.2%, respectively.

Geographically, sales climbed 11.1% in Europe, which represented 15% of the fiscal fourth quarter’s total sales, compared with the prior-year quarter, primarily driven by acquisitions. North American sales, accounting for 77% of total sales, increased 5.1% year over year due to strength in turnkey and system solutions for high-performance buildings.

Sales in Latin America, representing 4% of total sales, rose 18.9% year over year. Sales in Africa, the Middle East and other foreign markets increased 14.5% year over year, while Asia-Pacific sales surged 39.4% year over year. Emerging-market growth benefited from demand for engineered solutions for high-performance buildings and infrastructure projects.

RPM’s Operational Discussion

Selling, general and administrative expenses were $635.3 million compared with $592.8 million in the prior-year quarter. As a percentage of net sales, the metric remained unchanged at 28.5%.

Adjusted EBIT increased 7.7% year over year to a record $338.6 million. Adjusted EBIT margin expanded 10 bps to 15.2%. Higher volumes improved fixed-cost utilization, while operational-efficiency initiatives helped offset increased healthcare and insurance expenses and inflation.

Segmental Details of RPM International

Construction Products Group: In the reported quarter, the segment’s net sales increased 8.8% year over year to $904.2 million, owing to 5.7% organic sales growth, a 1.6% contribution from acquisitions net of divestitures and a 1.5% favorable foreign currency translation impact.

Adjusted EBIT of $175.1 million increased 14.6% year over year, and adjusted EBIT margin expanded 100 bps to 19.4%. Results benefited from broad-based strength led by concrete admixtures, roofing restoration systems and labor-saving wall systems for high-performance buildings, including data centers.

Performance Coatings Group: The segment’s net sales grew 5% year over year to $562.8 million. Sales increased 2.2% organically, while acquisitions and favorable foreign currency translation added 1.5% and 1.3%, respectively.

Adjusted EBIT rose 10.6% year over year to $84.9 million, and adjusted EBIT margin increased 80 bps to 15.1%. Strength in fireproofing systems, infrastructure projects and food coatings and ingredients was partly offset by a $3.2-million bad-debt expense related to a customer bankruptcy.

Consumer Group: Net sales in the segment increased 7% year over year to $764.8 million. Organic sales declined 0.8%, while acquisitions and favorable foreign currency translation contributed 7.2% and 0.6%, respectively.

The segment’s adjusted EBIT increased 2.6% year over year to $123.3 million. Adjusted EBIT margin contracted 70 bps to 16.1%. Acquisitions, pricing and operational improvements more than offset lower volumes, inflation and reduced fixed-cost absorption.

RPM’s Fiscal 2026 Highlights

For fiscal 2026, RPM reported adjusted earnings of $5.53 per share, up 4.3% year over year from $5.30. Net sales of $7.86 billion increased 6.7% year over year from $7.37 billion.

Adjusted EBIT increased 4.4% year over year to a record $1.02 billion. Growth was supported by higher sales, improved fixed-cost leverage and benefits from operational-improvement initiatives.

RPM International’s Balance Sheet

At the fiscal 2026-end, RPM International had total liquidity of $1.09 billion compared with $969.1 million at the fiscal 2025-end. This includes cash and cash equivalents of $315.2 million compared with $302.1 million at the fiscal 2025-end.

Total debt at the fiscal 2026-end was $2.53 billion, down from $2.65 billion at the fiscal 2025-end, as the company used a portion of its strong operating cash flow to reduce debt.

Cash provided by operating activities amounted to $898.7 million in fiscal 2026, up from $768.2 million in the prior year.

In fiscal 2026, capital expenditures were $223.5 million compared with $229.9 million in fiscal 2025. The company returned $349.2 million to stockholders through cash dividends and share repurchases, up 7.3% year over year from $325.6 million.

RPM’s Fiscal 2027 Outlook

For the first quarter of fiscal 2027, RPM expects consolidated sales to increase in the mid-single-digit range year over year. Sales across the Construction Products, Performance Coatings and Consumer groups are also projected to grow in the mid-single-digit range year over year.

Consolidated adjusted EBITDA is expected to increase in the mid-single-digit range year over year. For fiscal 2027, management expects sales growth of 3% to 7% and adjusted EBITDA growth of 5% to 10% year over year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, RPM International has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, RPM International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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