What You Should Expect From RPM International's Q2 Earnings?

RPM International Inc. (RPM) is slated to report its second-quarter fiscal 2026 results on Jan. 8, before the opening bell.In the last reported quarter, RPM’s adjusted earnings per share (EPS) and net sales topped the Zacks Consensus Estimate by 0.5% and 3.4%, respectively. Both metrics grew year over year by 2.2% and 7.4%, respectively.The company’s earnings topped analysts’ expectations in three of the trailing four quarters and missed on the remaining occasion, with the negative average surprise being 5.4%.How Are Estimates Placed for RPM Stock?The Zacks Consensus Estimate for the fiscal second quarter’s adjusted EPS has declined in the past 30 days to $1.42 per share from $1.43. The revised estimated figure indicates 2.2% growth from the year-ago figure of $1.39 per share.RPM International Inc. Price and EPS Surprise RPM International Inc. price-eps-surprise | RPM International Inc. QuoteThe consensus mark for net sales is pegged at $1.93 billion, indicating 4.7% year-over-year growth.Factors Likely to Shape RPM’s Q2 ResultsNet SalesRPM International's fiscal second-quarter net sales are likely to have increased year over year on the back of higher contributions from all its reportable segments — Construction Products Group (“CPG”), Performance Coatings Group (“PCG”) and Consumer Group. The growth is expected to have been driven by stronger sales of systems and turnkey solutions for construction projects with demanding specifications, along with continued demand for products and services tied to maintenance and repair activities.Acquisitions are also expected to have supported the top line during the quarter. The additions of The Pink Stuff and Ready Seal are likely to have provided incremental revenue benefits. Management expects consolidated net sales to increase at a mid-single-digit rate year over year in the fiscal second quarter. By segment, the Consumer Group is expected to have grown sales moderately more than PCG and CPG due to acquisitions.Our model predicts CPG (which contributed 41.7% to the first quarter of fiscal 2026 net sales) sales to grow 4.3% year over year to $757.3 million. We expect net sales in the Consumer Group (32.8%) and PCG (25.5%) segments to increase year over year by 5.9% and 5%, respectively.As part of the restructuring actions and its MAP 2025 initiative, the company has segregated the Specialty Products Group business among its other three reportable segments. RPM expects that this strategic move will enable it to collaborate more closely to fuel revenue growth and profitability in the future.However, some challenges are likely to have persisted during the quarter. Economic uncertainty, tariff-related inflation and subdued consumer confidence remain concerns. Temporary inefficiencies from plant consolidations and higher interest expense are also expected to have weighed on results.Margins & EarningsIn the fiscal second quarter, RPM’s bottom line is expected to have gained on the back of its MAP 2025 initiatives, resulting in incremental savings in procurement, manufacturing and commercial excellence. Moreover, reduced advertising costs, insurance costs and decreased bonus expenses are expected to have aided the bottom line.The company expects adjusted EBIT to be up year over year in the mid-single-digit percentage range. Our model predicts the metric to be up 5.9% year over year to $319.4 million.What Our Model Indicates for RPMOur proven model does not conclusively predict an earnings beat for RPM International this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.Earnings ESP: The company’s earnings ESP is -1.31%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: RPM currently carries a Zacks Rank of 4 (Sell).Stocks With the Favorable CombinationsAccording to our model, the following companies in the broader Basic Materials sector possess the right combination of elements to post an earnings beat in the upcoming quarter.Agnico Eagle Mines (AEM) currently has an Earnings ESP of +29.54% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.Agnico Eagle reported better-than-expected earnings in all of the trailing four quarters, the average surprise being 11.6%. Earnings for Agnico Eagle’s to-be-reported quarter are expected to grow 69.8% year over year.Coeur Mining (CDE) currently has an Earnings ESP of +7.86% and a Zacks Rank of 1.Coeur Mining reported better-than-expected earnings in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 106.6%. Earnings for Coeur Mining’s to-be-reported quarter are expected to grow 172.7% year over year.Element Solutions (ESI) has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.Element Solutions reported better-than-expected earnings in all of the trailing four quarters, the average surprise being 2.7%. Earnings for Element Solutions’ to-be-reported quarter are expected to grow 2.9% year over year.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Element Solutions Inc. (ESI): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report Coeur Mining, Inc. (CDE): Free Stock Analysis Report RPM International Inc. (RPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks