RPM Intl. Inc.

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.