When Construction Gets Selective, This Coatings Stock Gets Its Test
High borrowing costs and elevated energy prices are making investors demand more from every earnings report. That makes next week useful.
Three of this week’s names report earnings, while two others enter October with fresh evidence that demand for AI networking and intelligent buildings is still expanding.
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RPM International (RPM)
Catalyst: Reports Tuesday after record annual results and 16 record-adjusted-EBIT quarters out of the last 18
RPM finished fiscal 2026 with $7.86 billion in sales, up 6.7%, while adjusted EBIT topped $1 billion for the first time. Fourth-quarter sales increased 7.2% to a record $2.23 billion, and adjusted EPS rose nearly 10% to $1.89. Management expects fiscal 2027 sales growth of 3% to 7% and adjusted EBITDA growth of 5% to 10%.
The key is where that growth comes from. RPM sells coatings, sealants, roofing systems, flooring products, and construction materials used heavily in repair, maintenance, and infrastructure. Those markets hold up better than rate-sensitive new construction. Tuesday’s report will show whether pricing, restoration demand, and operational improvements are still enough to offset inflation.
My Take: Buy post-earnings weakness if sales stay positive and margins keep expanding. A guidance cut would weaken the setup.
What to watch: Organic sales, pricing, gross margin, infrastructure demand, and fiscal 2027 guidance.
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Constellation Brands (STZ)
Catalyst: Reports Tuesday with beer growth facing a tougher consumer test
Constellation’s last quarter showed a business moving in two directions. Beer sales and operating income both grew 2%, while Modelo, Corona, and Pacifico continued gaining share. The reshaped wine and spirits business also posted positive organic sales after major portfolio changes. Free cash flow increased 9% to $485 million.
The issue is consumer pressure. Constellation’s imported beers sit at premium price points, so Tuesday’s report becomes a useful read on whether customers are still paying up as household budgets tighten. Management previously maintained comparable EPS guidance of $11.20 to $11.90 and free cash flow of $1.6 billion to $1.7 billion.
My Take: STZ gets interesting if beer volumes hold and guidance stays intact. Do not buy the brand story alone if consumers start trading down.
What to watch: Beer volumes, Modelo and Corona demand, pricing, operating margins, and full-year guidance.
Acuity (AYI)
Catalyst: Intelligent Spaces grew nearly 45% last year while cash flow topped $800 million
Acuity just finished fiscal 2026 with $4.6 billion in revenue, up 7%, and $826 million in operating cash flow. Adjusted EPS increased 11% to $19.90. The traditional lighting business was basically flat, but Acuity Intelligent Spaces changed the story.
Intelligent Spaces revenue increased 44.8% for the year to $1.1 billion, while adjusted operating profit jumped 55%. That business includes building management, controls, and technology used to make offices, industrial sites, and other facilities more efficient. It gives Acuity a higher-growth engine alongside its mature lighting franchise.
My Take: AYI is worth buying on normal weakness while Intelligent Spaces keeps taking a larger share of the business. The old lighting segment does not need to boom if the technology side keeps compounding.
What to watch: Intelligent Spaces growth, lighting margins, operating cash flow, acquisitions, and capital allocation.
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Ciena (CIEN)
Catalyst: Management expects at least 30% revenue growth next year and laid out an aggressive three-year AI networking plan
Ciena’s latest quarter produced 37% revenue growth to $1.67 billion and a 215% increase in adjusted EPS. Management then raised full-year revenue guidance and said fiscal 2027 revenue should grow at least 30%.
The longer-term targets are even more important. Ciena expects roughly 30% annual revenue growth through fiscal 2029, with adjusted operating margin eventually reaching 32% to 35%. AI data centers need faster optical connections between facilities, and Ciena is one of the few pure-play companies operating at scale in that market. The risk is concentration, with two customers accounting for more than 40% of the latest quarter’s revenue.
My Take: CIEN remains one of the stronger mid-cap AI infrastructure names, but expectations are high. Buy pullbacks, not vertical momentum.
What to watch: Optical networking demand, backlog, customer concentration, supply capacity, and progress toward 2029 margins.
Delta Air Lines (DAL)
Catalyst: Reports Friday with premium travel demand and fuel costs back under the microscope
Delta enters Friday’s report after a strong June quarter. Revenue reached $17.7 billion, up 14%, while the company generated $1.7 billion of operating cash flow. Management maintained full-year guidance for $6.50 to $7.50 of adjusted EPS and $3 billion to $4 billion of free cash flow.
The next test is margins. Delta previously expected September-quarter revenue growth in the mid-teens and an operating margin between 11% and 13%. Premium and international demand have been strong, but higher energy costs can erase airline margin gains quickly. Friday’s report should tell us whether pricing and demand are strong enough to absorb that pressure.
My Take: Buy weakness only if Delta keeps full-year guidance intact. Strong revenue without margin protection is not enough.
What to watch: Premium revenue, international demand, fuel costs, operating margin, free cash flow, and 2026 guidance.
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Final Word
Next week gives you three immediate checkpoints.
RPM and Constellation report Tuesday. Delta reports Friday. Acuity offers a fresh building-technology growth story, while Ciena gives you direct exposure to the optical infrastructure behind AI.
The common thread is execution. RPM needs margins. Constellation needs premium beer demand. Delta needs pricing to offset fuel. Acuity needs Intelligent Spaces to keep scaling. Ciena needs its backlog to support aggressive long-term targets.
The takeaway: Let earnings confirm the business first. When the numbers stay intact and the market gives you weakness, that is where the better entries show up.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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