Carlisle Companies
CSL
$344.10
+1.70%
Carlisle Companies Inc. is a holding company that manufactures and sells single-ply roofing products and warranted systems for the commercial building industry, operating through Carlisle Construction Materials and Carlisle Weatherproofing Technologies. It is a market leader in commercial roofing, with a strong brand and a diversified product portfolio that includes EPDM, TPO, PVC membranes, and polyiso insulation. The current investor narrative centers on a potential transformative acquisition of Owens Corning, as reported in July 2026, which could significantly reshape the competitive landscape but also introduces execution risk and integration uncertainty. Additionally, the stock has faced a sharp decline from its 52-week high, prompting debate about whether the pullback represents a value opportunity or reflects underlying cyclical headwinds in construction markets.…
CSL
Carlisle Companies
$344.10
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Investment Opinion: Should I buy CSL Today?
Rating: Hold. The thesis is that Carlisle is a high-quality industrial with strong cash flow and ROE, but near-term headwinds from flat revenue and margin compression warrant caution. The analyst consensus (1 analyst) implies a target of ~$421 (based on forward P/E of 14.08x and EPS of $29.90), offering 27.5% upside, but the lack of coverage and negative momentum reduce conviction.
Supporting Evidence: The forward P/E of 14.08x is below the 5-year average of ~22x, suggesting value. Revenue growth is flat at 0.43% YoY, but free cash flow of $970.6M TTM is robust. ROE of 41.3% is exceptional, and the company maintains a current ratio of 3.09x. However, gross margin declined 237 bps YoY, and the stock has underperformed the market by 41.3% over the past year. The implied upside to the analyst target is 27.5%, but this is based on a single estimate.
Risks & Conditions: The Hold rating would upgrade to Buy if revenue growth re-accelerates above 5% and gross margins stabilize above 35%, or if the Owens Corning acquisition is completed on favorable terms. It would downgrade to Sell if revenue turns negative YoY or if gross margin falls below 30%. The stock appears fairly valued relative to its historical P/E range (6.6x-41.8x) but overvalued relative to the industry median P/E of 15x. Given the flat growth and margin pressure, the current valuation is not compelling enough to recommend a Buy.
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CSL 12-Month Price Forecast
Carlisle's outlook is balanced between a potential acquisition catalyst and cyclical headwinds. The base case of flat growth and stable margins is most likely (50% probability), with the stock trading in a range. The bull case (25%) depends on successful acquisition and market recovery, while the bear case (25%) reflects further deterioration. The neutral stance reflects the lack of clear directional catalysts and the stock's mixed fundamentals. An upgrade to bullish would require evidence of revenue acceleration or margin expansion; a downgrade to bearish would follow a sustained decline in orders or a failed acquisition.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carlisle Companies's 12-month outlook, with a consensus price target around $447.33 and implied upside of +30.0% versus the current price.
Average Target
$447.33
1 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
1
covering this stock
Price Range
$275 - $447
Analyst target range
Only 1 analyst covers the stock, with an average EPS estimate of $29.90 for the current year. The consensus recommendation is not explicitly provided, but the average target price is not available. However, based on the forward P/E of 14.08x and estimated EPS of $29.90, the implied target price is approximately $421 (14.08 * 29.90), which would represent 27.5% upside from the current price of $330.09. The limited coverage suggests the stock is not widely followed, which can lead to higher volatility and less efficient price discovery.
The estimated EPS range is $29.53 to $30.65, indicating a narrow spread and relatively high confidence in earnings. The revenue estimates range from $6.01 billion to $6.18 billion. The high target assumes continued margin stability and modest growth, while the low target may factor in further cyclical weakness. Institutional ratings show a mix of Overweight/Outperform and Hold actions, with recent upgrades from JP Morgan and Oppenheimer maintaining positive stances. The lack of a clear consensus target and limited coverage means investors should rely more on fundamental analysis and technical levels for decision-making.
Bulls vs Bears: CSL Investment Factors
Carlisle Companies presents a mixed picture: strong cash flow and high ROE are offset by flat revenue, margin compression, and a steep stock decline. The bull case hinges on a potential transformative acquisition (Owens Corning) and a forward P/E that implies 27.5% upside, while the bear case focuses on cyclical headwinds, deteriorating margins, and negative relative strength. The single most important tension is whether the company can reverse its revenue stagnation and margin erosion—if it does, the stock could re-rate higher; if not, further downside toward the 52-week low of $293.43 is possible. Currently, the bearish evidence (declining trends, underperformance) appears stronger, but the acquisition catalyst could shift the balance.
Bullish
- Strong Free Cash Flow Generation: Trailing twelve-month free cash flow is $970.6 million, providing ample liquidity for debt service, dividends, and potential acquisitions. This cash generation supports a 1.3% dividend yield and a payout ratio of 24.4%.
- High Return on Equity (ROE): ROE stands at 41.3%, significantly above the industry average, reflecting efficient use of equity capital. This metric indicates strong profitability and value creation for shareholders.
- Attractive Forward Valuation: The forward P/E of 14.08x is below the trailing P/E of 18.52x, implying expected earnings growth. Based on estimated EPS of $29.90, the implied target price is ~$421, offering 27.5% upside from the current price of $330.09.
- Potential Acquisition Catalyst: Reports of a buyout offer for Owens Corning (July 2026) could transform Carlisle's competitive position and growth trajectory. If successful, the acquisition could drive significant revenue synergies and margin expansion.
Bearish
- Flat Revenue Growth Trend: Revenue in Q4 2025 was $1.1277 billion, up only 0.43% year-over-year, and sequential quarterly revenue declined from $1.4495B in Q2 2025 to $1.1277B in Q4 2025. This stagnation suggests cyclical headwinds in commercial construction.
- Margin Compression: Gross margin fell to 33.75% in Q4 2025 from 36.12% a year ago, and operating margin declined to 16.95% from 19.95%. Rising input costs or pricing pressure are eroding profitability.
- Significant Underperformance vs. Market: The stock has declined 20.64% over the past year, while the S&P 500 gained 20.63%. Relative strength is deeply negative across all timeframes, indicating persistent selling pressure.
- Elevated Debt-to-Equity Ratio: Debt-to-equity of 1.60x is high for an industrial company, increasing financial risk. Interest coverage of 6.9x is adequate but could be strained if earnings decline further.
CSL Technical Analysis
The stock is in a sustained downtrend, with a 1-year price change of -20.64%, significantly underperforming the S&P 500's +20.63% gain. The current price of $330.09 sits at 75.7% of its 52-week range ($293.43 low to $435.92 high), indicating it is closer to the low end. This positioning suggests the market is pricing in significant negative sentiment, but also raises the possibility of a value opportunity if fundamentals stabilize. The 52-week low of $293.43 provides a key support level, while the high of $435.92 represents major resistance.
Short-term momentum shows a mixed picture: the 1-month change is +0.69%, while the 3-month change is -5.49%, indicating a recent deceleration in the downtrend. The 1-month relative strength vs. SPY is -3.38%, meaning the stock has underperformed the market. The divergence between the slight 1-month gain and the steep 1-year loss could signal a potential bottoming process, but the negative relative strength suggests continued weakness. Volume data is not available for deeper analysis, but the short ratio of 7.17 days indicates elevated bearish sentiment.
The stock's beta of 0.848 implies it is less volatile than the market, which is unusual given its recent sharp decline. Key support is at the 52-week low of $293.43, a break below which could signal further downside to the $280 area. Resistance is at the 52-week high of $435.92; a breakout above would require a 32% rally and would indicate a reversal of the downtrend. The current price is near the lower end of the range, and a breakdown below support could accelerate selling, while a bounce from support could lead to a mean-reversion rally.
Beta
0.85
0.85x market volatility
Max Drawdown
-32.1%
Largest decline past year
52-Week Range
$293-$436
Price range past year
Annual Return
-13.7%
Cumulative gain past year
| Period | CSL Return | S&P 500 |
|---|---|---|
| 1m | -2.7% | +0.0% |
| 3m | -0.9% | +7.6% |
| 6m | -5.4% | +9.1% |
| 1y | -13.7% | +21.3% |
| ytd | +4.8% | +10.7% |
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CSL Fundamental Analysis
Revenue has been relatively flat, with the most recent quarter (Q4 2025) showing $1.1277 billion, up only 0.43% year-over-year. The trailing twelve-month revenue trend shows deceleration: Q2 2025 revenue was $1.4495 billion, Q3 2025 was $1.3469 billion, and Q4 2025 was $1.1277 billion, indicating a sequential decline. The Carlisle Construction Materials segment drives the majority of revenue, but the Weatherproofing Technologies segment contributed $300.9 million in the latest quarter. The flat growth suggests the company is facing cyclical headwinds in commercial construction, which is a concern for the investment case.
The company is profitable, with net income of $127.4 million in Q4 2025 and a net margin of 11.3%. Gross margin was 33.75%, down from 36.12% in Q4 2024, indicating margin compression. Operating margin was 16.95%, also down from 19.95% a year ago. The declining margins suggest rising input costs or pricing pressure. However, the company has maintained positive net income, and the trailing twelve-month net income is solid. The industry average gross margin for construction materials is around 30-35%, so Carlisle's margins are in line but trending downward.
The balance sheet shows a debt-to-equity ratio of 1.60, which is elevated but manageable given the company's cash generation. Free cash flow for Q4 2025 was $346.1 million, and trailing twelve-month free cash flow was $970.6 million, providing ample liquidity. The current ratio of 3.09 indicates strong short-term liquidity. Return on equity (ROE) is 41.3%, which is very high, reflecting efficient use of equity. However, the high debt-to-equity ratio (1.60) and interest coverage of 6.9x suggest moderate financial risk. The company generates enough cash to cover debt payments and fund capital expenditures.
Quarterly Revenue
$1.1B
2025-12
Revenue YoY Growth
+0.4%
YoY Comparison
Gross Margin
33.8%
Latest Quarter
Free Cash Flow
$970600000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CSL Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 18.52x, while the forward P/E is 14.08x, implying the market expects earnings growth. The gap between trailing and forward P/E suggests that earnings are expected to increase, which is consistent with analyst estimates of $29.90 EPS for the current year. The PEG ratio is -0.48, which is negative due to negative earnings growth expectations, indicating that the stock may not be cheap on a growth-adjusted basis.
Compared to the industry average (Construction Materials), the trailing P/E of 18.52x is above the sector median of approximately 15x, representing a 23% premium. The PS ratio of 2.73x is also above the industry average of 1.5x. The premium may be justified by Carlisle's strong market position, high ROE (41.3%), and consistent profitability. However, the premium is narrowing as earnings growth slows, and the stock has de-rated significantly from its highs.
Historically, the stock's trailing P/E has ranged from 6.6x (Q2 2024) to 41.8x (Q1 2021). The current 18.52x is near the middle of this range, but below the 5-year average of around 22x. The PB ratio of 7.63x is near the high end of its historical range (3.6x to 7.7x), suggesting the market is still pricing in a premium for the company's asset base. The current valuation is not at extreme levels, but it is not cheap relative to history, implying that the market is cautiously optimistic but not overly enthusiastic.
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: Carlisle's debt-to-equity ratio of 1.60x is elevated, and while free cash flow of $970.6 million TTM provides coverage, any sustained downturn in earnings could pressure interest coverage (currently 6.9x). Revenue has been flat to declining sequentially, with Q4 2025 revenue of $1.1277B down from $1.4495B in Q2 2025, indicating potential demand weakness. Gross margin contracted from 36.12% to 33.75% year-over-year, suggesting input cost inflation or pricing pressure that could further compress net margins (currently 11.3%). The company's reliance on the commercial construction cycle makes it vulnerable to economic slowdowns.
Market & Competitive Risks: The stock's beta of 0.848 is below market, but its 1-year decline of 20.64% versus the S&P 500's +20.63% shows severe relative weakness. The trailing P/E of 18.52x is a 23% premium to the industry median of ~15x, leaving room for multiple compression if earnings disappoint. The potential acquisition of Owens Corning introduces integration risk and could strain the balance sheet. Recent news indicates the deal is far from certain, creating uncertainty. The short ratio of 7.17 days reflects elevated bearish sentiment.
Worst-Case Scenario: If the Owens Corning acquisition fails or is poorly executed, and commercial construction continues to weaken, revenue could decline further, margins could compress below 30% gross, and earnings could miss estimates. In this scenario, the stock could fall to its 52-week low of $293.43, representing a 11.1% decline from the current price of $330.09. A deeper recession could push the stock below that level, potentially to $280, implying a 15.2% loss. The historical max drawdown of -32.11% suggests a worst-case decline to around $224, a 32% loss from current levels.
FAQ
The primary risks are: (1) Financial risk: debt-to-equity of 1.60x is high, and interest coverage of 6.9x could be strained if earnings decline. (2) Competitive/cyclical risk: revenue is flat and margins are compressing (gross margin down 237 bps YoY), making the stock sensitive to commercial construction cycles. (3) Macro risk: with a beta of 0.848, the stock is less volatile than the market, but its 1-year decline of 20.64% shows it is highly sensitive to sector-specific headwinds. (4) Company-specific risk: the potential Owens Corning acquisition introduces integration uncertainty and could dilute shareholders if not executed well. The most severe risk is a prolonged downturn in construction leading to a 32% decline to the historical max drawdown level.
The 12-month outlook is balanced across three scenarios. The base case (50% probability) expects flat revenue and stable margins, with the stock trading in a range of $330-$380, near the implied analyst target of ~$421. The bull case (25% probability) assumes successful acquisition and market recovery, pushing the stock to $380-$435 (52-week high). The bear case (25% probability) sees further cyclical weakness and a failed acquisition, driving the stock down to $293-$330 (52-week low). The most likely scenario is the base case, with the key assumption being that revenue growth remains near 0% and margins stabilize. The AI assessment is neutral with medium confidence, reflecting the lack of clear catalysts.
CSL's trailing P/E of 18.52x is above the industry median of ~15x, suggesting a 23% premium. However, the forward P/E of 14.08x is below the 5-year historical average of ~22x, indicating the market expects earnings growth. The P/B ratio of 7.63x is near the high end of its historical range (3.6x-7.7x), implying the market still prices in a premium for its asset base. Compared to its own history, the stock is fairly valued near the middle of its P/E range (6.6x-41.8x). The current valuation implies the market expects modest earnings growth but is pricing in cyclical risks. Overall, CSL appears fairly valued relative to its history but overvalued relative to the industry.
CSL presents a mixed risk/reward. On the positive side, the forward P/E of 14.08x implies 27.5% upside to the implied analyst target of ~$421, and the company generates strong free cash flow ($970.6M TTM) with a high ROE of 41.3%. However, revenue is flat (0.43% YoY growth), margins are compressing, and the stock has underperformed the market by 41.3% over the past year. The biggest downside risk is a continued decline in commercial construction, which could push the stock to its 52-week low of $293.43 (11.1% downside). For long-term investors with a 3-5 year horizon, CSL could be a good buy at current levels if the acquisition catalyst materializes; for short-term traders, the negative momentum and high short ratio (7.17 days) suggest caution.
CSL is better suited for long-term investment (3-5 years) given its cyclical nature and current negative momentum. The stock's beta of 0.848 suggests lower volatility than the market, but its 1-year decline of 20.64% and negative relative strength indicate short-term headwinds. The dividend yield of 1.3% provides some income, but the payout ratio of 24.4% leaves room for growth. For short-term traders, the high short ratio (7.17 days) and proximity to the 52-week low ($293.43) could lead to a short squeeze, but the downtrend makes timing difficult. A concrete minimum holding period of 3 years is recommended to allow for a cyclical recovery and potential acquisition benefits to materialize.