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RPM International's Pricing, Cost Savings to Drive Q1 Growth, RBC Says

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RPM International's (RPM) continued strength in performance coatings group and construction products group, along with strong pricing and selling, general, and administrative savings will help its Q1 growth, RBC Capital Markets said in a note emailed Thursday.

The brokerage said the factors could offset inflation and drive the company to the midpoint of its above-Street +5% to 10% fiscal 2027 earnings before interest, taxes, depreciation, and amortization guide.

RPM posted an in-line Q4 earnings before interest and taxes but slightly beat on earnings per share, according to the note.

With regard to capital allocation, RBC said it expects RPM to spend $220 million to $240 million in capital expenditures in fiscal 2027 and generate about $770 million of free cash flow to be spent on bolt-on's, dividends, and share repurchases.

The brokerage also raised RPM's EBITDA estimate by $5 million to $410 million for Q1 and by $25 million to $1.325 billion for fiscal 2027.

RBC maintained an outperform rating and raised the price target to $128 from $126.

Price: $103.13, Change: $-4.30, Percent Change: -4.00%

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