-- RPM International (RPM) is expected to continue posting "solid" mid-single digit percentage growth in its Construction Products and Performance Coatings businesses, offsetting flat to lower-single digit percentage declines in its Consumer segment, RBC Capital Markets said in a Wednesday note.
The momentum is Construction Products business is expected to further continue in the company's fiscal 2027 supported by its share gains and focus on integrated turnkey solutions, whereby customers use RPM for design, installation, and ongoing maintenance and warranties, RBC said.
With the company expected to see 1% to 2% inflation in fiscal Q4, and another 6% to 8% in fiscal Q1, RPM is implementing price increases to recover margins, RBC said, adding that Construction Products and Performance Coatings businesses can raise prices faster than the Consumer segment.
RBC said it thinks RPM can generate about $600 million of free cash flow in fiscal 2026 and expects the company to spend $225 million to $235 million in fiscal 2026 capital expenditure and pay out about $300 million in dividends.
The bank maintained its outperform rating on RPM with a $130 price target.
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