RPM International Inc (NYSE:RPM): Is It A Smart Long Term Opportunity?
In August 2018, RPM International Inc (NYSE:RPM) announced its earnings update. Overall, analyst consensus outlook appear cautiously optimistic, as a 43% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 5.7%. Presently, with latest-twelve-month earnings at US$334m, we should see this growing to US$479m by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for RPM International
Can we expect RPM International to keep growing?
Longer term expectations from the 10 analysts covering RPM’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of RPM’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2021, RPM’s earnings should reach US$713m, from current levels of US$334m, resulting in an annual growth rate of 20%. This leads to an EPS of $4.41 in the final year of projections relative to the current EPS of $2.55. In 2021, RPM’s profit margin will have expanded from 6.3% to 12%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For RPM International, there are three relevant factors you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is RPM International worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RPM International is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of RPM International? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
