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RPM International: Analysts’ Recommendations and Target Prices

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Analysts’ recommendations

Currently, 13 different brokerage firms are actively tracking RPM International (RPM). Among them, 46% of the analysts recommended the stock as a “buy,” 54% of the analysts recommended the stock as a “hold,” and none of the analysts recommended the stock as a “sell.”

Analysts appear to be optimistically cautious on RPM International. Analysts’ consensus for RPM International indicates a 12-month target at $56.80, which implies a potential return of 1.8% over the closing price of $55.35 as of July 10, 2017.

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Why most analysts recommended a “hold”

RPM International announced a downward revision to its adjusted EPS (earnings per share). RPM International expects the adjusted EPS for fiscal 2017 to be $2.57–$2.67 compared to the earlier guidance of $2.62–$2.72. On a reporting basis, RPM International maintained the guidance of $1.54–$1.64. Cost control measures could help the company post better EPS in the upcoming quarter. Also, revenues from acquisitions are expected to contribute to the earnings growth. As a result, many analysts recommended a “hold” for RPM International.

Individual brokerage firms

  • Evercore rated RPM International as a “buy” with a target price of $59, which implies a potential return of 6.5%—compared to the closing price of $55.35 on July 10.
  • Seaport Global Securities rated RPM International as a “buy” with a target price of $60, which implies a potential return of 8.40%—compared to the closing price of $55.35 as of July 10, 2017.

Investors can indirectly hold RPM International by investing in the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL), which has invested 2.4% of its portfolio in RPM International. The fund’s top holdings include West Pharmaceutical Services (WST), MSA Safety (MSA), and Graco (GGG) with weights of 2.60%, 2.60%, and 2.50%, respectively, as of July 10, 2017.

In the next part, we’ll look at RPM International’s latest valuations compared to its peers.

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