Key Findings
The AI model forecasts Q2 2026 EPS of $1.44 versus Street consensus of $1.42, with 82% confidence. While the beat appears modest, Gemini sees structural margin improvement that the market is undervaluing.
Thesis
Gemini's thesis is that 'MAP 2025 is effectively decoupling RPM's bottom line from the volatility in its Consumer segment.' While acknowledging DIY exposure weakness (verified by Home Depot warnings), the model argues that Construction Products (+9% YoY on infrastructure tailwinds) and Performance Coatings (+5% on industrial reshoring) will offset. Gross margin is projected to expand 60 basis points YoY to ~42.2% from structural efficiency gains.
What This Means
This is a quality-over-quantity earnings story. Gemini is betting that RPM's diversified segment mix and cost discipline can overcome macro headwinds in the consumer DIY market. The specific 42.2% gross margin target provides a clear benchmark for validation.