(RPM) RPM International Inc. – Beats Consensus Estimates

October 16th, 2009

RPM Intl. Inc. (RPM) surprised analysts by posting sequential sales growth and estimates are on the rise.

Company Description

RPM owns subsidiaries that provide industrial and consumer coatings and sealants. The weekend warriors might recognize brand names like Rust-Oleum and DAP. Products range from roofing systems to floor coatings.

Beat the Street

On Oct 5 RPM reported first-quarter results for fiscal 2010. Despite a 7% decline in sales, to $916 million, the company managed to increase net income 5% to $73 million. Sequential sales were up about 7%.

This led to earnings per share of 57 cents, 4 cents higher than last year and 13 cents higher than the Zacks Consensus Estimate. The surprise snapped a current streak of misses.

Upward Revisions

Since the report, 4 of the 7 covering analysts increased full-year estimates. The Zacks Consensus Estimate is now $1.26, up 5 cents, for year-over-year growth of 20%. While only 1 analyst raised their estimate for next year, the consensus rose 6 cents, to $1.50.

Valuations

Shares are trading at roughly 15.5 times forward earnings, which is near the norm for the industry. However, the projected growth gives RPM a PEG of 1.1 times, making it a better value than most of its competitors.

The Chart

RPM’s stock was volatile on the earnings news, but has since gone on to set new highs. Take a look at the chart below.


Zacks Investment Research
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More on this topic (What's this?)
Member Q&A: RPM International (tickerspy.com, 10/26/09)
RPM International Increases Dividend 2.5% (Disciplined Approach to Investing, 10/8/09)
RPM International Inc. (RPM) Dividend Stock Analysis (Dividends Value, 6/21/10)
Stock Analysis: RPM International Inc. (RPM) (The DIV-Net, 6/14/10)
Read more on RPM at Wikinvest

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