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Why RPM International (RPM) Stock Is Gaining Today

Stocks in this article: RPM

NEW YORK (TheStreet) -- RPM International (RPM) shares are up 2.6% to $45.66 on Monday after announcing a 9% increase in fourth quarter revenues and raising its full year fiscal 2015 guidance to between $2.38 and $2.42 per diluted share, in line with analysts $2.40 per share estimates.

The chemical products company reported earnings of 80 cents per diluted share, 2 cents better than analysts expected, on revenue of $1.28 billion, ahead of analysts $1.2 billion estimates.

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In separate news, the company entered a tentative settlement for $797.5 million dollars in an asbestos claims lawsuit against its now bankrupt Bondex and Specialty Products units.

A bankruptcy judge had previously estimated that claims from current and future victims could total $1.17 billion.

TheStreet Ratings team rates RPM INTERNATIONAL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate RPM INTERNATIONAL INC (RPM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 136.36% and other important driving factors, this stock has surged by 25.82% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 138.3% when compared to the same quarter one year prior, rising from -$42.36 million to $16.22 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 2.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 44.06% is the gross profit margin for RPM INTERNATIONAL INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RPM's net profit margin of 1.87% significantly trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, RPM INTERNATIONAL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: RPM Ratings Report
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