Carlisle Companies
CSL
$331.00
-6.46%
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. As a market leader in commercial roofing, it holds a distinct competitive position with premium products like EPDM, TPO, and PVC membranes. The current investor narrative is driven by a potential buyout offer for Owens Corning, as reported in recent news, which could reshape the competitive landscape, while the stock has experienced a volatile year with a 7.3% decline over the past 12 months despite a recent recovery.…
CSL
Carlisle Companies
$331.00
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Investment Opinion: Should I buy CSL Today?
Rating: Hold. CSL is a high-quality industrial with strong margins and cash flow, but stagnant revenue and elevated valuation limit upside. The sole analyst rates it Overweight, but the lack of a price target makes conviction difficult. Supporting Evidence: Trailing P/E of 18.5x is above the industry median of 15x, but forward P/E of 15.6x suggests earnings growth. Revenue growth is near zero (0.4% YoY), while net margin of 14.8% and ROE of 41.3% are exceptional. Free cash flow of $970.6M TTM provides a 7.1% FCF yield. Risks & Conditions: The biggest risks are margin compression and failure to grow revenue. This Hold would upgrade to Buy if revenue growth accelerates above 5% or P/E compresses below 14x. It would downgrade to Sell if gross margins fall below 30% or debt-to-equity exceeds 2.0. Overall, CSL appears fairly valued relative to its history but overvalued versus peers, given the premium P/E.
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CSL 12-Month Price Forecast
CSL is a high-quality but mature business with limited growth prospects. The current valuation is fair but not compelling, and the buyout news adds uncertainty. The base case of modest returns is most likely, but margin trends and macro conditions could tilt the balance. Upgrading to bullish would require evidence of revenue acceleration or successful M&A, while a bearish shift would follow margin deterioration or a broad downturn.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carlisle Companies's 12-month outlook, with a consensus price target around $430.30 and implied upside of +30.0% versus the current price.
Average Target
$430.30
1 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
1
covering this stock
Price Range
$265 - $430
Analyst target range
Only one analyst covers the stock, with a consensus recommendation leaning bullish (Overweight/Outperform from JP Morgan and Oppenheimer). The average target price is not explicitly provided, but the estimated EPS of $29.90 implies a forward P/E of 12.3x at the current price of $366.73, suggesting significant upside if the multiple expands. The limited coverage (1 analyst) indicates this is a mid-cap stock with less institutional attention, which can lead to higher volatility and less efficient price discovery. The range of EPS estimates is narrow ($29.63 to $30.05), implying high conviction among the few analysts, but the lack of a price target range makes it difficult to assess upside/downside. Recent ratings actions show no changes, with JP Morgan and Oppenheimer maintaining Overweight/Outperform, while Truist Securities holds at Hold, indicating a mixed but generally positive sentiment.
Bulls vs Bears: CSL Investment Factors
CSL presents a mixed picture: strong profitability and a potential buyout catalyst are countered by stagnant revenue growth and margin compression. The bull case rests on the forward P/E discount and robust cash flows, while the bear case highlights valuation premiums and cyclical risks. Currently, the evidence slightly favors the bear side due to the lack of revenue growth and margin pressure, but the buyout news could shift sentiment. The key tension is whether CSL can reignite growth or if margin erosion will persist, determining if the premium valuation is justified.
Bullish
- Strong ROE and Profitability: CSL boasts an ROE of 41.3%, far exceeding the industry average, driven by high leverage and profitability. Net margin of 14.8% and operating margin of 19.9% demonstrate efficient operations and pricing power.
- Potential Buyout Catalyst: Recent news of a buyout offer for Owens Corning could reshape the competitive landscape and unlock value for CSL. If successful, it may signal management's confidence in growth and lead to synergies.
- Forward P/E Discount to Trailing: The forward P/E of 15.6x is lower than the trailing P/E of 18.5x, implying expected earnings growth. This suggests the market anticipates improved profitability, offering upside if estimates are met.
- Strong Liquidity and Cash Flow: With a current ratio of 3.09 and free cash flow of $346.1M in Q4 2025, CSL has ample liquidity to weather downturns and invest in growth. The debt-to-equity of 1.60 is manageable given strong cash generation.
Bearish
- Revenue Growth Stagnation: Q4 2025 revenue grew only 0.4% YoY to $1.128B, and TTM revenue shows deceleration from earlier quarters. This indicates a mature, cyclical business with limited top-line expansion potential.
- Margin Compression Trends: Gross margin fell to 33.8% in Q4 2025 from 36.1% a year earlier, while operating margin declined to 16.9% from 19.9%. Persistent cost pressures could erode profitability further.
- Elevated Valuation vs. Peers: Trailing P/E of 18.5x is a 23% premium to the industry median of ~15x. The P/B of 7.6x is well above historical averages of 4-5x, suggesting the stock is priced for perfection.
- Limited Analyst Coverage: Only one analyst covers CSL, leading to less efficient price discovery and potential volatility. The lack of a consensus price target makes it difficult to gauge upside/downside.
CSL Technical Analysis
The stock is in a recovery phase after a significant downtrend, with the 1-year price change of -7.3% reflecting a decline from the 52-week high of $435.92. Currently trading at $366.73, the stock is at 84% of its 52-week range, suggesting it has rebounded from the low of $293.43 but remains well below the peak, indicating a potential value opportunity if the recovery continues. Short-term momentum is strong, with a 1-month price change of +6.5% and a 3-month change of +10.8%, both outperforming the S&P 500's respective returns of -1.25% and +13.56% on a relative strength basis. This acceleration in momentum diverges from the negative 1-year trend, signaling a possible trend reversal or mean reversion, though the stock's beta of 0.85 suggests lower volatility than the market. Key support lies at the 52-week low of $293.43, while resistance is at the 52-week high of $435.92; a breakout above resistance would signal a strong uptrend, while a breakdown below support could indicate further downside. The stock's beta of 0.85 implies it is 15% less volatile than the S&P 500, which may appeal to risk-averse investors.
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
-17.4%
Cumulative gain past year
| Period | CSL Return | S&P 500 |
|---|---|---|
| 1m | -2.1% | +0.8% |
| 3m | -5.6% | +9.6% |
| 6m | -6.7% | +7.4% |
| 1y | -17.4% | +20.2% |
| ytd | +0.8% | +9.3% |
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CSL Fundamental Analysis
Revenue has been relatively stable, with the most recent quarterly revenue of $1.128 billion in Q4 2025 showing a modest 0.4% YoY growth, while the trailing twelve-month revenue trend indicates deceleration from earlier quarters (e.g., Q2 2025 revenue of $1.450 billion). The Carlisle Construction Materials segment drives the majority of revenue, but the lack of segment detail for the latest quarter limits granular analysis; the overall growth trajectory suggests a mature, cyclical business with limited top-line expansion. The company is profitable, with net income of $127.4 million in Q4 2025 and a net margin of 11.3%, though gross margin has compressed to 33.8% from 36.1% a year earlier, indicating cost pressures. Operating margin of 16.9% is healthy but below the 19.9% reported in Q4 2024, reflecting margin contraction that warrants monitoring. The balance sheet shows a debt-to-equity ratio of 1.60, indicating moderate leverage, while free cash flow of $346.1 million in Q4 2025 provides ample coverage for capital expenditures of $39.9 million. ROE of 41.3% is exceptionally high, driven by leverage and profitability, but the current ratio of 3.09 suggests strong liquidity, reducing near-term financial risk.
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
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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 18.5x, while the forward P/E is 15.6x, implying the market expects earnings growth over the next year, as the forward multiple is lower. The gap between trailing and forward P/E suggests analysts anticipate higher future earnings, which is consistent with the estimated EPS of $29.90 for the current fiscal year. Compared to the industry average (Construction Materials), the stock's trailing P/E of 18.5x is at a premium to the sector median of approximately 15x, reflecting a 23% premium. This premium may be justified by the company's strong ROE of 41.3% and net margin of 14.8%, which are above industry norms. Historically, the stock's trailing P/E has ranged from 6.6x (Q2 2024) to 41.8x (Q1 2021), and the current 18.5x is near the middle of this range, suggesting it is not excessively overvalued relative to its own history. The P/B ratio of 7.6x is elevated compared to historical averages around 4-5x, indicating the market is pricing in a premium for the company's asset efficiency.
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's debt-to-equity ratio of 1.60 indicates moderate leverage, but interest expense of $27.7M in Q4 2025 is well covered by operating income of $191.1M. However, gross margin compression from 36.1% to 33.8% YoY signals cost pressures that could squeeze net income if revenue remains flat. Free cash flow of $346.1M provides a buffer, but reliance on the cyclical construction industry means a downturn could severely impact earnings. Market & Competitive Risks: The stock's beta of 0.85 suggests lower volatility than the market, but its premium valuation (P/E 18.5x vs industry 15x) makes it vulnerable to multiple compression if growth disappoints. The potential buyout of Owens Corning introduces execution risk and regulatory scrutiny. Additionally, the stock's 1-year decline of 7.3% despite a recent recovery shows sensitivity to macro headwinds. Worst-Case Scenario: A severe recession in commercial construction could drive revenue down 20%, pushing the stock to its 52-week low of $293.43, a 20% decline from the current price of $366.73. Combined with margin compression, earnings could fall, leading to a P/E contraction to 12x, implying a price of ~$240, a 35% loss from current levels.
FAQ
The key risks are: 1) Revenue stagnation - Q4 2025 revenue grew only 0.4% YoY, indicating a mature business with limited growth. 2) Margin compression - gross margin fell from 36.1% to 33.8% YoY, and operating margin from 19.9% to 16.9%, squeezing profitability. 3) Valuation risk - the P/E premium to peers (18.5x vs 15x) leaves the stock vulnerable to multiple contraction if growth disappoints. 4) Macro sensitivity - as a construction materials company, CSL is cyclical; a recession could drive revenue down significantly. The most severe risk is a 35% decline to the 52-week low of $293.43 if earnings fall and multiples compress.
The 12-month forecast is mixed. In the base case (50% probability), the stock trades between $360 and $400, driven by low single-digit revenue growth and stable margins. The bull case (25% probability) sees the stock reaching $420-$450 if the Owens Corning buyout succeeds and growth accelerates. The bear case (25% probability) targets $290-$330 if a recession hits and margins contract. The most likely scenario is the base case, with modest returns. The sole analyst estimates EPS of $29.90, implying a forward P/E of 12.3x at the current price, suggesting upside if the multiple expands.
CSL appears fairly valued relative to its own history but overvalued versus peers. The trailing P/E of 18.5x is near the middle of its 5-year range (6.6x to 41.8x), suggesting it is not excessively priced historically. However, compared to the construction materials industry median of 15x, it trades at a 23% premium. The forward P/E of 15.6x implies the market expects earnings growth, which is consistent with analyst estimates of $29.90 EPS. The P/B of 7.6x is elevated versus historical averages of 4-5x, indicating the market is paying a premium for asset efficiency. Overall, the valuation is fair but not a bargain.
CSL is a hold for most investors. The stock offers strong profitability (ROE 41.3%) and a forward P/E of 15.6x, which is reasonable if earnings grow as expected. However, revenue growth is nearly zero (0.4% YoY), and the trailing P/E of 18.5x is a 23% premium to the industry median. The biggest downside risk is margin compression, which could erode earnings. For long-term investors seeking stable cash flows, CSL may be suitable, but growth investors may find better opportunities elsewhere. The potential buyout of Owens Corning adds speculative upside but also uncertainty.
CSL is better suited for long-term investment due to its stable cash flows and moderate growth profile. The stock's beta of 0.85 indicates lower volatility than the market, making it less attractive for short-term traders seeking quick gains. The dividend yield of 1.3% provides some income, but the payout ratio of 24.4% suggests room for growth. Given the cyclical nature of construction, a minimum holding period of 3-5 years is recommended to ride out economic cycles. Short-term traders may find opportunities around earnings or M&A news, but the limited analyst coverage reduces liquidity and predictability.