RPM International (RPM) is dealing with headwinds tied to weak housing trends and soft demand in its Consumer segment, RBC Capital Markets said.

The firm said in a Wednesday note that RPM has taken steps to improve efficiency by consolidating eight plants and reducing inventories, which helped eliminate fixed costs and lift cash flow to $91.5 million despite some transition costs.

It expects the company's operational improvement program, Margin Achievement Plan, 2025 benefits to scale more meaningfully in fiscal 2026.

While RPM is somewhat insulated from tariffs, given its local production and intra-North America sales footprint, it faces middle-single-digit raw material inflation, with a projected $75 million impact.

By segment, RBC expects fiscal Q4 growth in the performance coatings group, led by high-performance buildings and passive fire protection, while the consumer and specialty products groups are likely to decline in the low-single digits. Construction products group is expected to remain flat.

The backlog remains strong across most segments, and the company continues to pursue merger and acquisition opportunities, most recently announcing plans to acquire The Pink Stuff for what RBC called a discounted multiple with attractive margins.

RBC maintained a sector perform rating on RPM and lowered its price target to $116 from $126.

Shares of RPM International were down 4% in recent trading.

Price: 101.44, Change: -4.20, Percent Change: -3.98