Rpm International Inc/De/ (RPM) Stock Analysis and Metrics

Rpm International

NYSE: RPM

$107.06 ▲ +2.29 (+2.19%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap13.63 Bn

P/E21.22

P/S1.73

Div. Yield0.02

ROIC (Qtr)0.03

Total Debt (Qtr)2.53 Bn

Revenue Growth (1y) (Qtr)7.20

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About

RPM International Inc. manufactures and markets specialty chemical product lines including paints coatings sealants adhesives roofing systems and related products. The company serves the construction industrial specialty and consumer markets with a global presence.

The company generates revenue primarily through the sale of its specialty chemical products across its four reportable segments. In the fiscal year ended May 31 2025 RPM International Inc. recorded net sales of $7,400,000,000. Its product portfolio includes paints coatings adhesives sealants roofing systems flooring systems corrosion control coatings fireproofing products restoration equipment and specialty coatings for industrial and consumer use.

The company operates through the following segments.

• CPG: This segment accounts for approximately 38 percent of consolidated net sales or $2,800,000,000 and includes construction sealants and adhesives coatings roofing systems concrete admixture and repair products building envelope solutions parking deck systems insulated cladding materials metal composite material and aluminum composite material wall panels firestopping flooring systems and weatherproofing solutions.

• PCG: This segment accounts for approximately 20 percent of consolidated net sales or $1,500,000,000 and includes high performance flooring systems corrosion control and fireproofing coatings infrastructure repair systems fiberglass reinforced plastic structures and raised flooring systems for outdoor environments.

• Consumer: This segment accounts for approximately 33 percent of consolidated net sales or $2,400,000,000 and includes rust preventive special purpose and decorative paints caulks sealants primers contact cement cleaners flooring systems and sealers woodcare coatings abrasives and other branded consumer products.

• SPG: This segment accounts for approximately 9 percent of consolidated net sales or $700,000,000 and includes restoration services equipment colorants nail enamels factory applied industrial coatings preservation products edible coatings and specialty glazes for pharmaceutical and food industries.

RPM International Inc. is a major producer of caulks cleaners sealants insulating foams patch and repair products for consumer and residential building trades. The company also holds leading positions in roofing systems urethane sealants waterproofing materials aluminum coatings cement based coatings hobby paints small project paints industrial corrosion control products firestopping fireproofing consumer rust preventive coatings polymer floorings fluorescent coatings pigments fiberglass reinforced plastic gratings raised flooring systems water and fire damage restoration products carpet cleaning truck mount systems and shellac based coatings. While the firm does not claim a significant share of the worldwide protective coatings market it benefits from a diversified brand portfolio global manufacturing footprint and strong research and development capabilities. Competitors include various local regional national and multinational firms but the company's markets are fragmented so no single rival dominates across all product lines.

RPM International Inc. sells its products to a diverse customer base that includes contractors distributors end users industrial manufacturing facilities public institutions home improvement centers mass merchandisers hardware stores paint stores and do it yourself consumers. The company's ten largest Consumer segment customers accounted for roughly 22 to 25 percent of total net sales in recent years indicating a concentrated yet still broad reliance on major retail chains.

Investment Thesis

▲ Bull case

RPM International is strategically positioned to capitalize on structural demand for maintenance, restoration, and energy-efficient building solutions, which represent approximately two-thirds of its sales and provide resilient growth even during economic volatility. The company’s focus on turnkey system solutions for high-performance buildings—such as combining Nudura insulated concrete forms with Dryvit exterior insulation—creates differentiated value by lowering operating costs for end users and improving resistance to extreme weather, a proposition gaining urgency amid rising utility costs and climate-driven infrastructure stress. This approach has already driven record sales in the Construction Products and Performance Coatings groups, with organic growth of 6.9% and 5.1% respectively in Q3 FY26, and is being reinforced by recent leadership changes in the Consumer Group under Don Harmeyer, who is reallocating assets toward highest-growth opportunities while maintaining financial discipline. The company’s ability to outgrow its underlying markets through this value proposition, combined with improving gross margin leverage from higher volumes, suggests the market is underestimating the durability and scalability of its core restoration-focused business model beyond cyclical DIY weakness.
Operational excellence initiatives under the MAP program are generating sustainable, multi-year cost savings that are being reinvested into growth, creating a self-reinforcing cycle of margin expansion and competitive advantage. The Green Belt program, now trained across over 600 associates and expanded to administrative functions, has already delivered more than $50 million in savings with a $30 million pipeline, while SG&A-focused optimization actions announced in January generated approximately $5 million in Q3 savings and are expected to contribute around $20 million in Q4 and $75 million annually in FY27. These actions go beyond simple expense reduction—they are designed to increase organizational agility, improve customer service, and accelerate growth, with the most meaningful changes occurring in the Consumer Group. Critically, management noted that stripping out FX and acquisitions, SG&A was relatively flat year-over-year in dollar terms despite inflationary pressures, indicating genuine structural efficiency gains. The market appears to be overlooking how these savings are not only protecting margins but also funding strategic investments in high-growth areas like metal roofing via the Kalzip acquisition and emerging markets infrastructure, positioning RPM for superior long-term earnings power.
RPM’s center-led procurement strategy and supply chain resilience are providing a durable hedge against raw material volatility, a critical advantage that the market is underappreciating amid Middle East-driven inflation fears. The company has contracts covering the vast majority of its raw material volume requirements, uses FIFO accounting to delay P&L impact of cost changes, and has qualified multiple suppliers for key materials—actions that have kept global supply conditions generally good with only limited disruptions, primarily in the Middle East. Despite raw materials representing approximately 60% of cost of goods sold, RPM expects only 1% to 2% inflation in Q4 FY26, with mid- to high single-digit inflation anticipated in Q1 FY27, and is actively implementing price increases to offset unmitigatable costs. Furthermore, over half of RPM’s raw material basket is not derived from oil or natural gas, reducing exposure to energy price swings. The procurement team’s execution has been repeatedly praised by management as a key factor in navigating tariff and geopolitical challenges, yet investors remain focused on near-term inflation headlines rather than recognizing the structural insulation RPM has built into its cost base, which could allow it to maintain margin stability even if inflation persists longer than expected.

RPM International is strategically positioned to capitalize on structural demand for maintenance, restoration, and energy-efficient building solutions, which represent approximately two-thirds of its sales and provide resilient growth even during economic volatility. The company’s focus on turnkey system solutions for high-performance buildings—such as combining Nudura insulated concrete forms with Dryvit exterior insulation—creates differentiated value by lowering operating costs for end users and improving resistance to extreme weather, a proposition gaining urgency amid rising utility costs and climate-driven infrastructure stress. This approach has already driven record sales in the Construction Products and Performance Coatings groups, with organic growth of 6.9% and 5.1% respectively in Q3 FY26, and is being reinforced by recent leadership changes in the Consumer Group under Don Harmeyer, who is reallocating assets toward highest-growth opportunities while maintaining financial discipline. The company’s ability to outgrow its underlying markets through this value proposition, combined with improving gross margin leverage from higher volumes, suggests the market is underestimating the durability and scalability of its core restoration-focused business model beyond cyclical DIY weakness.
Operational excellence initiatives under the MAP program are generating sustainable, multi-year cost savings that are being reinvested into growth, creating a self-reinforcing cycle of margin expansion and competitive advantage. The Green Belt program, now trained across over 600 associates and expanded to administrative functions, has already delivered more than $50 million in savings with a $30 million pipeline, while SG&A-focused optimization actions announced in January generated approximately $5 million in Q3 savings and are expected to contribute around $20 million in Q4 and $75 million annually in FY27. These actions go beyond simple expense reduction—they are designed to increase organizational agility, improve customer service, and accelerate growth, with the most meaningful changes occurring in the Consumer Group. Critically, management noted that stripping out FX and acquisitions, SG&A was relatively flat year-over-year in dollar terms despite inflationary pressures, indicating genuine structural efficiency gains. The market appears to be overlooking how these savings are not only protecting margins but also funding strategic investments in high-growth areas like metal roofing via the Kalzip acquisition and emerging markets infrastructure, positioning RPM for superior long-term earnings power.
RPM’s center-led procurement strategy and supply chain resilience are providing a durable hedge against raw material volatility, a critical advantage that the market is underappreciating amid Middle East-driven inflation fears. The company has contracts covering the vast majority of its raw material volume requirements, uses FIFO accounting to delay P&L impact of cost changes, and has qualified multiple suppliers for key materials—actions that have kept global supply conditions generally good with only limited disruptions, primarily in the Middle East. Despite raw materials representing approximately 60% of cost of goods sold, RPM expects only 1% to 2% inflation in Q4 FY26, with mid- to high single-digit inflation anticipated in Q1 FY27, and is actively implementing price increases to offset unmitigatable costs. Furthermore, over half of RPM’s raw material basket is not derived from oil or natural gas, reducing exposure to energy price swings. The procurement team’s execution has been repeatedly praised by management as a key factor in navigating tariff and geopolitical challenges, yet investors remain focused on near-term inflation headlines rather than recognizing the structural insulation RPM has built into its cost base, which could allow it to maintain margin stability even if inflation persists longer than expected.

▼ Bear case

RPM International’s Consumer Group continues to face structural headwinds that are being masked by acquisition-driven growth and pricing actions, with organic sales declining 2.4% in Q3 FY26 and marking the fourth consecutive quarter of negative organic growth, signaling deep and persistent weakness in core DIY markets despite management’s optimism about stabilization. The company acknowledged that DIY takeaway remains “really punky” and that easier year-over-year comparisons are not materializing as expected, with consumer sentiment being undermined by sustained inflation, high interest rates, and retailer caution—factors that are unlikely to reverse quickly given the Federal Reserve’s higher-for-longer stance and ongoing housing affordability challenges. While leadership changes under Don Harmeyer and Tom Schweiger aim to reallocate SG&A toward growth opportunities and improve consumer-centric marketing, the group’s reliance on acquisitions (which contributed 9.0% of sales growth in Q3) and pricing to recover inflation (1.3% benefit from FX, 2.4% organic decline) underscores a lack of genuine organic demand revival. The market may be overestimating the durability of acquisition integration benefits and underestimating the difficulty of rebuilding consumer trust and engagement in a category where price sensitivity and private label competition remain intense, especially as promotional spending is being shifted toward driving purchases rather than just store traffic.
The company’s exposure to geopolitical supply chain disruptions in the Middle East, Africa, and Asia Pacific—regions accounting for approximately 4% of year-to-date revenues but disproportionately impacting raw material costs and availability—poses a tangible risk to Q4 FY26 and early FY27 performance that is not fully reflected in current guidance ranges, despite management’s assurances about supplier contracts and FIFO accounting. Frank Sullivan explicitly acknowledged that March performance in the Middle East was strong due to inventory burn-through, but warned that Q4 and beyond will feel the impact as supply challenges hinder raw material replenishment, with potential for project delays and slowdowns in April and May. While Europe and South America (20% of sales) face meaningful inflation and North America (70% of sales) experiences lesser inflation, the Middle East’s role as a critical chokepoint for certain raw materials—combined with the region’s volatility—could trigger broader cost spikes if strait closures or production shutdowns escalate. The market may be complacent about the tail-risk scenario where Middle East instability persists or worsens, particularly given that RPM’s confidence in supply stability diminishes sharply beyond Q1 FY27, and the company admitted that “if the situation in the Middle East spins out of control, obviously, all bets are off” regarding raw material costs and availability.
RPM’s reliance on acquisition-driven growth and cost-cutting initiatives to sustain adjusted EBIT expansion may encounter diminishing returns, as the company’s organic growth engine—particularly in its core Construction Products and Performance Coatings segments—shows signs of slowing when stripped of M&A and FX benefits, raising concerns about the sustainability of its outperformance narrative. Although Europe grew over 20% in Q3 FY26, this was driven almost entirely by M&A and FX, with organic performance flat to slightly down; similarly, North America’s 6.3% growth relied on high-performance building solutions and M&A, with no clear indication of broadening organic demand beyond niche infrastructure projects. The company’s ability to generate record adjusted EBIT through SG&A-focused optimization actions (which contributed to profitability but excluded $22.1 million in pre-tax charges from MAP initiatives) and fixed-cost leverage from higher volumes may not be repeatable if volume growth decelerates, especially as plant consolidation inefficiencies—though expected to wind down by fall—have already acted as a temporary headwind. Furthermore, the $75 million in annualized SG&A savings targeted for FY27, while meaningful, represents a finite pool of efficiency gains, and management’s admission that they will need to “see a continuation of what we just generated in the third quarter” for future improvement implies that operational momentum is fragile and highly dependent on continued volume growth in a volatile macro environment.

RPM International’s Consumer Group continues to face structural headwinds that are being masked by acquisition-driven growth and pricing actions, with organic sales declining 2.4% in Q3 FY26 and marking the fourth consecutive quarter of negative organic growth, signaling deep and persistent weakness in core DIY markets despite management’s optimism about stabilization. The company acknowledged that DIY takeaway remains “really punky” and that easier year-over-year comparisons are not materializing as expected, with consumer sentiment being undermined by sustained inflation, high interest rates, and retailer caution—factors that are unlikely to reverse quickly given the Federal Reserve’s higher-for-longer stance and ongoing housing affordability challenges. While leadership changes under Don Harmeyer and Tom Schweiger aim to reallocate SG&A toward growth opportunities and improve consumer-centric marketing, the group’s reliance on acquisitions (which contributed 9.0% of sales growth in Q3) and pricing to recover inflation (1.3% benefit from FX, 2.4% organic decline) underscores a lack of genuine organic demand revival. The market may be overestimating the durability of acquisition integration benefits and underestimating the difficulty of rebuilding consumer trust and engagement in a category where price sensitivity and private label competition remain intense, especially as promotional spending is being shifted toward driving purchases rather than just store traffic.
The company’s exposure to geopolitical supply chain disruptions in the Middle East, Africa, and Asia Pacific—regions accounting for approximately 4% of year-to-date revenues but disproportionately impacting raw material costs and availability—poses a tangible risk to Q4 FY26 and early FY27 performance that is not fully reflected in current guidance ranges, despite management’s assurances about supplier contracts and FIFO accounting. Frank Sullivan explicitly acknowledged that March performance in the Middle East was strong due to inventory burn-through, but warned that Q4 and beyond will feel the impact as supply challenges hinder raw material replenishment, with potential for project delays and slowdowns in April and May. While Europe and South America (20% of sales) face meaningful inflation and North America (70% of sales) experiences lesser inflation, the Middle East’s role as a critical chokepoint for certain raw materials—combined with the region’s volatility—could trigger broader cost spikes if strait closures or production shutdowns escalate. The market may be complacent about the tail-risk scenario where Middle East instability persists or worsens, particularly given that RPM’s confidence in supply stability diminishes sharply beyond Q1 FY27, and the company admitted that “if the situation in the Middle East spins out of control, obviously, all bets are off” regarding raw material costs and availability.
RPM’s reliance on acquisition-driven growth and cost-cutting initiatives to sustain adjusted EBIT expansion may encounter diminishing returns, as the company’s organic growth engine—particularly in its core Construction Products and Performance Coatings segments—shows signs of slowing when stripped of M&A and FX benefits, raising concerns about the sustainability of its outperformance narrative. Although Europe grew over 20% in Q3 FY26, this was driven almost entirely by M&A and FX, with organic performance flat to slightly down; similarly, North America’s 6.3% growth relied on high-performance building solutions and M&A, with no clear indication of broadening organic demand beyond niche infrastructure projects. The company’s ability to generate record adjusted EBIT through SG&A-focused optimization actions (which contributed to profitability but excluded $22.1 million in pre-tax charges from MAP initiatives) and fixed-cost leverage from higher volumes may not be repeatable if volume growth decelerates, especially as plant consolidation inefficiencies—though expected to wind down by fall—have already acted as a temporary headwind. Furthermore, the $75 million in annualized SG&A savings targeted for FY27, while meaningful, represents a finite pool of efficiency gains, and management’s admission that they will need to “see a continuation of what we just generated in the third quarter” for future improvement implies that operational momentum is fragile and highly dependent on continued volume growth in a volatile macro environment.

Peer Comparison

Companies in the Specialty Chemicals

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	LIN	Linde Plc	237.95 Bn	33.52	6.87	24.68 Bn
2	SHW	Sherwin Williams Co	78.17 Bn	30.07	3.27	11.70 Bn
3	ECL	Ecolab Inc.	76.02 Bn	30.01	4.73	8.24 Bn
4	APD	Air Products & Chemicals, Inc.	66.38 Bn	47.14	5.33	17.40 Bn
5	PPG	Ppg Industries Inc	26.02 Bn	3,717.41	1.61	7.83 Bn
6	LYB	LyondellBasell Industries N.V.	22.51 Bn	-28.53	0.76	11.45 Bn
7	SQM	Chemical & Mining Co Of Chile Inc	19.70 Bn	21.77	3.72	4.79 Bn
8	IFF	International Flavors & Fragrances Inc	19.51 Bn	-102.16	1.81	5.82 Bn

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