On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its price target for RPM International (NYSE:RPM) shares, listed on the New York Stock Exchange (NYSE:RPM), from $150.00 to $140.00. Despite the reduction, the firm maintained an Outperform rating on the stock.
According to InvestingPro data, analyst targets for RPM range from $122 to $153, with the stock currently trading around $122 per share. RPM's current market valuation appears slightly above its Fair Value based on comprehensive analysis. The change comes after RPM International provided guidance for its February quarter of 2025, indicating an expected EBIT of approximately $110 million at the midpoint.
This figure falls short of the $136 million anticipated by Morgan Stanley (NYSE:MS) USA and the $127 million consensus among Bloomberg analysts. InvestingPro analysis shows RPM maintains strong financial health with a GREAT overall score, supported by a healthy current ratio of 2.23 and robust profit margins of 41.4%.
RPM International's guidance suggests a flat EBIT for the February quarter compared to the previous year, which has been attributed to significantly harsher weather conditions affecting sales, particularly in the do-it-yourself (DIY) segment. The company anticipates a downturn in year-over-year DIY sales due to these adverse weather conditions. However, for the November quarter, RPM International expects an increase in year-over-year sales for commercial products, although it is typically a season with lower sales volume.
Looking ahead, RPM International forecasts a stronger performance for the May quarter of 2025. The company's guidance implies a 13% year-over-year increase at the midpoint, amounting to $324 million. This is in comparison to Morgan Stanley USA's estimate of $312 million and the consensus estimate of $317 million. The anticipated improvement for the May quarter is partly due to easier comparisons with the previous year's figures.
The statement from Mizuho regarding RPM International's outlook highlighted the contrasting quarterly expectations. The firm noted that while the February quarter faces challenges, there are positive projections for the subsequent May quarter.
The analyst from Mizuho commented on the situation, stating, "The weak FebQ25 guide reflects 'meaningfully harsher weather' quarter-to-date, which likely results in down Y/Y DIY sales.
Commercial products expected to be up Y/Y in NovQ, but seasonally low. The strong MayQ25 reflects easier comps." Notably, InvestingPro data reveals RPM's impressive 53-year streak of maintaining dividend payments, with a current yield of 1.68%. Investors can access 8 additional ProTips and a comprehensive Pro Research Report covering RPM's complete financial profile through InvestingPro.
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