On Wednesday, BMO Capital maintained its optimistic stance on RPM International Inc. (NYSE:RPM), reiterating an Outperform rating with a steady price target of $123.00. The firm's analysis suggests a potential for RPM International to achieve better-than-anticipated earnings per share (EPS) growth, driven by the MAP25 initiative's efficiencies and reductions in selling, general, and administrative expenses (SG&A). Additionally, market share gains are expected to contribute to a mid-teens EPS growth rate.
BMO Capital has made slight adjustments to its forecasts for RPM International, reducing revenue estimates for the first quarter of fiscal year 2025 (F1Q25), while concurrently increasing the expected EBIT margins for the same period. This recalibration follows the completion of the recent quarter and precedes the company's fiscal fourth quarter report in July, where RPM will provide guidance for F25.
The firm's confidence in RPM International's performance is partly based on the anticipated benefits of the MAP25 program, which is designed to improve operational efficiencies. The positive impact of MAP25, along with expected reductions in SG&A costs, were topics previously discussed at the BMO's Chemicals at Farm to Market Conference.
The adjustments in the forecasts are described as modest, indicating a careful refinement rather than a significant shift in expectations. BMO Capital's analysis underscores the potential for RPM International to outperform in its sector, despite the slight tempering of revenue projections for the upcoming fiscal year.
In closing, BMO Capital's outlook for RPM International remains positive, with the company poised to leverage strategic efficiency improvements and cost reductions to fuel its earnings growth in the coming years. The reaffirmed price target of $123.00 reflects this continued confidence in RPM's growth trajectory.
In other recent news, RPM International Inc. reported record sales and earnings for its fiscal third quarter of 2024, marking the ninth consecutive quarter of such performance. The Construction Products Group (CPG) and Performance Coatings Group (PCG) were key drivers of this growth, despite volume declines in the Consumer and Specialty Products segments. The company's recent developments also include record cash flow from operations and expanded margins.
RPM International's performance is attributed to its MAP 2025 operational improvement initiatives. The company anticipates flat sales in the fourth quarter, with growth in CPG offset by challenges in other segments. However, it expects a recovery in the Consumer segment and positive momentum in CPG and PCG in fiscal year 2025.
Furthermore, RPM International has expressed interest in acquiring PPG's North American architectural paint business. The company is also planning to invest in emerging markets and new plants in Malaysia and India to bolster growth. These are among the recent developments that highlight RPM International's strategic approach to expansion and efficiency.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.