RPM
RPM International Inc.
$98.44
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 26.9% above fair value
You pay
$98.44
Bear
$62.04
Fair
$77.55
Bull
$93.06
Bear
$62.04
-37.0%
$5.17 × 12x P/E
Fair
$77.55
-21.2%
$5.17 × 15x P/E
Bull
$93.06
-5.5%
$5.17 × 18x P/E
Adjust Assumptions
15.0x
5.17$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$126.70
Divergence from AlphaVal
39%
Summary
Applying a 15x P/E to adjusted EPS of $5.17, the base-case value is $77.55 per share. DDM cross-check: $130.31.
Warnings
Dividend-based valuation: $130.31 (above our primary estimate by 68%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $126.70 (from 22 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples