Carlisle Companies
CSL
$343.77
+0.82%
Carlisle Companies Inc. is a diversified industrial holding company primarily focused on manufacturing and selling single-ply roofing products and building envelope solutions for the commercial construction industry. It operates through two key segments: Carlisle Construction Materials, a leader in premium roofing systems, and Carlisle Weatherproofing Technologies, which produces waterproofing and air barrier systems. The current investor narrative centers on the company's strategic transformation and portfolio optimization, including recent divestitures, as it navigates cyclical demand in the construction sector while aiming to improve margins and shareholder returns through disciplined capital allocation.…
CSL
Carlisle Companies
$343.77
Investment Opinion: Should I buy CSL Today?
Rating & Thesis: Hold. CSL is a high-quality industrial with superior profitability caught in a cyclical downdraft; the current valuation fairly balances its strong cash generation and ROE against clear near-term growth and margin headwinds. Analyst sentiment is mixed but leans positive, with an implied forward P/E offering some margin of safety.
Supporting Evidence: The stock trades at a reasonable forward P/E of 14.66x, a discount to its trailing multiple, based on estimated EPS of $29.90. Its exceptional ROE of 41.26% and robust TTM free cash flow of $970.6 million are standout strengths. However, stagnant Q4 revenue growth of 0.43% YoY and the 32.11% maximum drawdown highlight significant operational and price momentum challenges that offset these positives.
Risks & Conditions: The thesis would upgrade to Buy if revenue growth re-accelerates above 5% YoY and gross margins stabilize above 35%, signaling the cyclical trough is passing. It would downgrade to Sell if the stock breaks below its 52-week low of $293.43 on deteriorating fundamentals, or if quarterly revenue declines turn negative. Relative to its history and the sector, CSL appears fairly valued, not cheap enough to ignore the cyclical risks nor expensive enough to justify a Sell given its quality metrics.
Sign up to view all
CSL 12-Month Price Forecast
CSL presents a classic 'show me' story. Its superb profitability metrics (ROE, FCF) are at odds with its deteriorating growth and momentum profile. The forward P/E offers some protection, but the stock is unlikely to sustainably rally until revenue and margin trends inflect positively. The base case of range-bound trading is most likely, with the stock oscillating between support at ~$293 and resistance at ~$410. The stance would upgrade to Bullish on a confirmed breakout above $410 on strong volume, supported by improving fundamentals. It would downgrade to Bearish on a decisive break below the $293 support level.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carlisle Companies's 12-month outlook, with a consensus price target around $446.90 and implied upside of +30.0% versus the current price.
Average Target
$446.90
1 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
1
covering this stock
Price Range
$275 - $447
Analyst target range
Analyst coverage for Carlisle appears limited based on the provided data, with only one analyst providing estimates for revenue and EPS. The single analyst estimates revenue of $6.067 billion and EPS of $29.90 for the period in view. This lack of broad coverage is typical for a mid-cap industrial company and can lead to less efficient price discovery and higher volatility, as seen in the stock's significant drawdown. The implied valuation from the EPS estimate and the current forward PE suggests the market is largely aligning with this solitary forecast. Institutional ratings show a generally positive but cautious stance, with firms like JP Morgan and Oppenheimer maintaining 'Overweight' or 'Outperform' ratings, while Truist and Loop Capital have 'Hold' ratings. The most recent action was a downgrade from Loop Capital from 'Buy' to 'Hold' in late July 2025, which may have contributed to the stock's underperformance. The wide dispersion in recent price action, from a high near $435 to a low near $293, reflects the high uncertainty and lack of consensus among market participants regarding the company's near-term trajectory in a potentially slowing construction market.
Bulls vs Bears: CSL Investment Factors
The evidence currently tilts bearish, primarily due to the stock's severe price underperformance, stagnant revenue growth, and emerging margin pressures, which outweigh its strong underlying profitability and cash generation. The single most important tension in the investment debate is whether CSL's premium margins and exceptional ROE can be sustained and justify its valuation multiple in the face of a potentially protracted downturn in its core commercial construction end-markets. Resolution of this tension depends on the company's ability to navigate cyclical headwinds without significant further erosion in its financial metrics.
Bullish
- Exceptional Return on Equity: CSL's trailing ROE stands at an impressive 41.26%, significantly above typical industrial company levels. This indicates highly efficient use of shareholder capital and a durable competitive advantage in its niche roofing markets.
- Strong Free Cash Flow Generation: The company generated $970.6 million in TTM free cash flow, supporting a robust balance sheet with a current ratio of 3.09. This strong cash flow provides ample flexibility for debt service, strategic investments, and shareholder returns via buybacks.
- Attractive Forward Valuation: CSL trades at a forward P/E of 14.66x based on analyst EPS estimates of $29.90. This represents a meaningful discount to its trailing P/E of 18.48x and suggests the market has priced in a conservative outlook, offering potential for multiple expansion if execution improves.
- Solid Profitability & Margins: Despite recent compression, the company maintains a healthy operating margin of 16.95% (Q4 2025) and a net margin of 14.76%. These levels are strong for the construction sector and demonstrate pricing power and cost discipline.
Bearish
- Stagnant Revenue Growth: Q4 2025 revenue grew a mere 0.43% YoY, and sequential revenue declined from $1.45B in Q2 2025 to $1.13B in Q4 2025. This indicates significant cyclical softness and raises questions about near-term top-line momentum.
- Severe Technical Downtrend & Underperformance: The stock is down 6.30% over the past year and has underperformed the SPY by -29.16 percentage points. It is trading 21% below its 52-week high and experienced a -32.11% maximum drawdown, reflecting deep negative momentum and investor skepticism.
- Margin Compression Amidst Slow Growth: Gross margin fell to 33.75% in Q4 2025 from 36.11% in Q4 2024, and operating margin declined from 23.11% in Q2 2025 to 16.95% in Q4 2025. This pressure on profitability during a growth slowdown is a key concern for valuation.
- Elevated Financial Leverage: The debt-to-equity ratio of 1.60 is high, indicating significant financial leverage. While cash flow is strong, this increases financial risk and interest expense sensitivity in a rising rate environment or during an earnings downturn.
CSL Technical Analysis
The stock is in a pronounced downtrend from its recent highs, trading near the lower end of its 52-week range. With a 1-year price change of -6.30% and a current price of $343.77, the stock is positioned approximately 21% above its 52-week low of $293.43 but 21% below its 52-week high of $435.92, indicating it is in a recovery phase from a significant drawdown but remains under pressure relative to its peak. The stock has demonstrated high volatility, evidenced by a maximum drawdown of -32.11% over the observed period, and a beta of 0.857 suggests it is slightly less volatile than the broader market, though its recent price action has been more turbulent. Recent momentum shows signs of stabilization but remains weak relative to the market. The stock is down -0.59% over the past month and up a modest 0.69% over the past three months, significantly underperforming the SPY, which gained 12.0% over the same three-month period, resulting in a stark relative strength of -11.31. This divergence suggests the stock is experiencing a significant sector or company-specific headwind, with the short-term trend failing to confirm any meaningful recovery from the longer-term downtrend. Key technical levels are clearly defined, with immediate support at the 52-week low of $293.43 and resistance at the 52-week high of $435.92. A sustained break below the $293 support would signal a continuation of the bearish trend, potentially targeting lower levels, while a move above the $400-$410 zone (the February peak area) would be necessary to suggest a trend reversal is underway. The stock's beta of 0.857 indicates its volatility is generally in line with the market, but the deep drawdown and weak relative strength highlight elevated idiosyncratic risk that requires careful monitoring.
Beta
0.86
0.86x market volatility
Max Drawdown
-32.1%
Largest decline past year
52-Week Range
$293-$436
Price range past year
Annual Return
-6.3%
Cumulative gain past year
| Period | CSL Return | S&P 500 |
|---|---|---|
| 1m | -0.6% | +0.3% |
| 3m | +0.7% | +10.9% |
| 6m | +3.8% | +9.3% |
| 1y | -6.3% | +24.3% |
| ytd | +4.7% | +8.8% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CSL Fundamental Analysis
Revenue growth has been stagnant to slightly negative on a year-over-year basis, with Q4 2025 revenue of $1.13 billion representing a mere 0.43% increase from the prior year's Q4. Sequentially, revenue has declined from $1.45 billion in Q2 2025, indicating potential seasonality and softening demand. The Carlisle Construction Materials segment is the primary revenue driver, but the provided segment data for Carlisle Weatherproofing Technologies shows only $300.9 million, suggesting a smaller contribution and highlighting the company's reliance on the commercial roofing cycle. Profitability remains solid but has shown compression from recent peaks. The company is profitable, with Q4 2025 net income of $127.4 million and a trailing twelve-month net margin of 14.76%. However, gross margin for Q4 2025 was 33.75%, down from 36.11% in Q4 2024, indicating some pressure on input costs or pricing. Operating margin for the quarter was 16.95%, which is healthy for the industry, but the trend from higher margins in mid-2024 (e.g., 23.11% in Q2 2025) suggests normalization after a period of exceptional performance. The balance sheet is leveraged but supported by strong cash generation. The debt-to-equity ratio is elevated at 1.60, indicating a significant use of debt financing. However, financial health is bolstered by a robust current ratio of 3.09 and substantial free cash flow, with TTM free cash flow reported at $970.6 million. Return on equity is exceptionally strong at 41.26%, demonstrating efficient use of shareholder capital, and the company generates ample cash to service debt, fund operations, and return capital to shareholders, as evidenced by consistent stock repurchases in the cash flow statements.
Quarterly Revenue
$1.1B
2025-12
Revenue YoY Growth
+0.00%
YoY Comparison
Gross Margin
+0.33%
Latest Quarter
Free Cash Flow
$970600000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CSL Overvalued?
Given the company's consistent profitability, the primary valuation metric selected is the Price-to-Earnings (PE) ratio. The trailing PE ratio stands at 18.48x, while the forward PE is lower at 14.66x, based on estimated EPS of $29.90. This forward discount suggests the market anticipates earnings growth or reflects a more conservative outlook on near-term prospects compared to the trailing twelve-month performance. Compared to sector averages, Carlisle trades at a premium on a sales basis but appears reasonably valued on an earnings basis. Its Price-to-Sales ratio of 2.73x and EV/Sales of 3.19x are likely above the industrial median, reflecting its premium market position and higher margins. The forward PE of 14.66x, however, does not appear excessively high for a company with a strong ROE of 41.26%, though it must be weighed against the modest revenue growth trajectory. Historically, the stock's valuation has compressed from higher levels. The current trailing PE of 18.48x is below the 26.05x seen at the end of Q4 2025 and significantly below the 41.78x from Q1 2021, indicating the market has de-rated the stock amidst its price decline and growth normalization. Trading near the middle of its multi-year PE range, the stock is not at a historical extreme, suggesting the current price reflects a balanced view of its fundamentals and outlook.
PE
18.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 7x~42x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: CSL faces risks from its elevated financial leverage, with a debt-to-equity ratio of 1.60, which could amplify downside in an earnings downturn. Profitability is showing signs of compression, with gross margin declining 236 basis points YoY to 33.75% in Q4 2025, indicating potential pricing pressure or rising input costs. Furthermore, revenue concentration in the cyclical Carlisle Construction Materials segment and sequential revenue declines from $1.45B to $1.13B over the last two quarters of 2025 highlight vulnerability to a construction slowdown, challenging the company's ability to grow into its current valuation.
Market & Competitive Risks: The stock trades at a premium sales multiple (P/S of 2.73x, EV/Sales of 3.19x) relative to many industrials, creating valuation compression risk if growth stagnates. Its beta of 0.857 suggests it is not immune to broader market downturns. Competitive risks are inherent in its niche, and the recent analyst downgrade by Loop Capital from 'Buy' to 'Hold' reflects growing caution on the near-term outlook. The stock's stark -11.31 percentage point relative strength versus the SPY over three months underscores significant sector-specific headwinds that may persist.
Worst-Case Scenario: A severe downturn in commercial construction, combined with sustained margin pressure, could lead to consecutive earnings misses and a de-rating of the stock towards its 52-week low of $293.43. This scenario would be exacerbated by high financial leverage limiting strategic flexibility. From the current price of $343.77, this implies a realistic downside of approximately -15%. A breach of this support level could trigger further selling, potentially pushing the stock towards the $270-$280 range, representing a total loss of -20% to -25% from current levels.
FAQ
The key risks are, in order of severity: 1) Cyclical Demand Risk: CSL's revenue is heavily exposed to the commercial construction cycle, which appears to be softening, as evidenced by sequential revenue declines. 2) Margin Compression Risk: Gross margins fell 236 bps YoY to 33.75% in Q4 2025; further erosion would directly impact earnings. 3) Financial Leverage Risk: The elevated debt-to-equity ratio of 1.60 increases financial risk if earnings decline. 4) Valuation & Sentiment Risk: The stock's premium sales multiples and recent analyst downgrade (Loop Capital to Hold) leave it vulnerable to further de-rating if growth disappoints.
Our 12-month outlook presents three scenarios. The Base Case (55% probability) sees the stock trading between $360 and $395, as the company muddles through a cyclical slowdown with stable margins and low-single-digit growth. The Bull Case (25% probability) targets $418 to $435 (near its 52-week high) on a sharp construction recovery and margin expansion. The Bear Case (20% probability) sees a retest of the 52-week low, with a range of $293 to $320, driven by a deeper recession and earnings misses. The Base Case is most likely, hinging on the assumption that revenue growth stabilizes near 1-3% and the forward P/E multiple holds around 14-16x.
CSL appears fairly valued relative to its current fundamentals. Its forward P/E of 14.66x is a discount to its trailing P/E of 18.48x, reflecting market expectations of normalized earnings. However, its Price-to-Sales ratio of 2.73x and EV/Sales of 3.19x are likely at a premium to many industrial peers, justified by its superior profitability metrics like net margin (14.76%) and ROE (41.26%). The valuation implies the market expects modest growth and stable margins, but is not pricing in a significant recovery. It is neither deeply undervalued nor egregiously overvalued, sitting in a fair value range given the cyclical risks.
CSL is a Hold, not a compelling buy at the current moment for most investors. While its forward P/E of 14.66x and exceptional 41.26% ROE suggest underlying quality, the stock faces significant near-term headwinds including stagnant revenue growth (0.43% YoY in Q4) and margin compression. The -32.11% maximum drawdown and severe underperformance versus the market (-29.2% over one year) indicate negative momentum that may not have fully played out. It could be a good buy for patient, value-oriented investors who believe the commercial construction cycle is near a bottom, but they should be prepared for further volatility and may find better entry points on weakness.
CSL is more suitable for a long-term investment horizon (3+ years) rather than short-term trading. Its business is cyclical, and navigating the current downturn requires patience. The stock's high volatility (32.11% max drawdown) and weak short-term momentum make it a poor candidate for short-term trades. Long-term investors can benefit from the company's strong market position, exceptional ROE, and capital return potential via buybacks, but must be willing to endure significant price swings tied to the construction cycle. A minimum holding period of 2-3 years is suggested to potentially ride through the cycle and capture a recovery.