RPM International rose 7.8% in November
RPM International (RPM), a specialty coating company, was strong in November. The stock gained 7.8% and was one of the top gainers among specialty companies in November. RPM International outperformed the broader market S&P 500 (SPY), which gained 1.8% during the same period.
What drove the stock up?
The major push for the stock came from the long-term guidance it provided on its Investor Day. During the event, Frank C. Sullivan, RPM International’s chairman and CEO, revealed a few financial goals for the company to achieve by May 31, 2021.
- RPM International is targeting annual revenues of $6.25 billion.
- The company is targeting an EBIT of $1 billion.
- RPM International aims to return $1.5 billion to shareholders through $1 billion in share repurchases and $500 million in dividends.
- The company is targeting cost savings of $290 million by December 31, 2020.
- RPM International wants to reduce the headcount by 500 in fiscal 2019.
RPM International redeemed its 2.25% convertible senior notes due in 2020, which will help to reduce its interest expense.
As a result of the company’s long-term guidance, several brokerage firms increased RPM International’s target price:
- RBC (RY) raised its target price for RPM International to $66, which implies a 3% potential return over the closing price as of December 4.
- BMO raised its target price for RPM International to $77, which implies a return potential of 20.1% over the closing price as of December 4.