RPM International (RPM) is expected to recover in fiscal 2026 and 2027, supported by infrastructure exposure, improving construction trends, and potential for dividend hikes and buybacks, RBC Capital Markets said in a note Tuesday.

The company's over 20% exposure to infrastructure should help it outperform peers despite ongoing softness in DIY markets, the investment firm said.

Recent selling, general and administrative expenses, including $5.3 million for hiring and $3.2 million for advertising in fiscal Q1, are expected to support long-term growth despite near-term margin pressure.

The firm lowered its fiscal Q2 EPS forecasts to $1.42 from $1.45 but raised fiscal 2027 estimates to $6.35 from $6.25.

RPM is also expected to generate $700 million in free cash flow in fiscal 2026, allowing for dividend increases and share repurchases into 2027, the note said.

RBC upgraded RPM International to outperform from sector perform and raised its price to $132 from $121.

Price: 104.13, Change: +1.50, Percent Change: +1.46