Basic materials company RPM International (NYSE:RPM) is scheduled to report its first quarter Fiscal 2023 results on October 5, before the market opens. RPM International engages in the provision of specialty coatings, sealants, building materials, and related services. Year-to-date, RPM stock has lost 10.6%.
The Street expects RPM to post adjusted earnings of $1.33 per share in Q1, meaningfully higher than its prior-year period’s figure of $1.08 per share. Meanwhile, revenue is pegged at $1.88 billion, representing a year-over-year jump of 13.9%, but 5% lower than Q4FY22 revenue of $1.98 billion.
Meanwhile, during its year-ending Fiscal 2022 earnings call, RPM’s management had guided for Q1FY23 year-over-year revenue growth in the mid-teens. Also, adjusted earnings before interest and tax (EBIT) are expected to grow by 20% to 25% over the past year.
Notably, the company announced its MAP 2025 (Margin Achievement Plan) initiative recently, in which it plans to achieve $8.5 billion in annual sales, a 42% gross margin, and a 16% adjusted EBIT margin.
Increasing prices of raw materials, labor, and packaging may have affected RPM’s margins in the first quarter. However, the company plans to pass on these higher costs to consumers. Moreover, high energy prices and supply-chain issues also pushed up the prices for logistics. Also, a strong U.S. Dollar will continue to be a headwind for the specialty chemicals manufacturer.
Is RPM Stock a Good Buy?
Wall Street analysts remain split on RPM International stock. On TipRanks, RPM stock has a Moderate Buy consensus rating. This is based on three Buys, three Holds, and one Sell. The average RPM International price forecast of $95.14 implies 9.8% upside potential from current levels.
Ending Thoughts – Insiders and Hedge Funds are Bullish on RPM Stock
TipRanks’ Insider Trading Activity shows that the Insider Signal is currently Positive on RPM International, with corporate insiders buying $10 million worth of RPM shares in the last quarter.
Furthermore, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in RPM International is currently Very Positive, as seven hedge funds increased their cumulative holdings of RPM stock by 245,800 shares in the last quarter.
