I don't get it at all! On January 8th, RPM raised estimates for Fiscal Year 5/08.They stated that earnings would be 10% ABOVE the $1.57 earned in FY5/07. This is simple math. The new estimate by RPM is therefore $1.57 x 110% = $1.73. Yet, IBES has FY5/08 at $1.69. The stock price (which is all we actually care about) went down 4% today to $19.48. Even using the $1.69 this is only 11.5 x FY5/08. Why?
I love that I'm talking to myself here! Lack of interest = opportunity. By the way, RPM has steadily risen on large volume lately. Given their UPOD profile, what do you expect from tomorrow's earnings?
No surprise in the "surprise." RPM beats and raises estimates again. FY5/08 will now be up 10-12% over FY5/07. We should now see "the Street" raise estimates to about $1.74. What is RPM worth with this level of earnings? My maximum target price is 18x $1.74 = $31.32.My minimum is 13x $1.74 = $22.62. Still a nice risk/reward proposition. We'll revsit the numbers after next quarter's "beat". Any other ideas? Thanks. H.