Carlisle Companies
CSL
$318.22
-2.31%
Carlisle Companies, Inc. is a diversified industrial holding company that manufactures premium single-ply roofing products and warranted roof systems, including EPDM, TPO, and PVC membranes and polyiso insulation, through its Carlisle Construction Materials segment, alongside building envelope solutions such as waterproofing, air/vapor barriers, and spray polyurethane foam systems through Carlisle Weatherproofing Technologies. The company operates as a focused building products specialist with leading share in commercial roofing, where its specification-driven, warranty-backed model and dense contractor distribution network create meaningful competitive moats and pricing power. The current investor narrative centers on Carlisle's aggressive portfolio transformation, including its reported buyout interest in Owens Corning, which would represent a transformational consolidation of the roofing and building materials landscape, alongside its just-achieved 50 consecutive years of dividend increases and a capital allocation track record that has driven roughly 15.7% annualized returns since 1990. Debate among investors is focused on whether the company's margin expansion and M&A ambitions can offset cyclical softness in commercial construction demand and the earnings volatility introduced by its recent divestiture-heavy restructuring.…
CSL
Carlisle Companies
$318.22
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Investment Opinion: Should I buy CSL Today?
Synthesized rating: Hold with a bullish bias. The core thesis is that Carlisle's recent 10.2% three-month decline has created a valuation opportunity in a high-quality building products franchise, but near-term margin compression and acquisition uncertainty warrant patience until the forward earnings recovery is confirmed. The analyst consensus is 'buy' with a recommendation mean of 2.2 and an average target price of $410.38, implying 24.6% upside, which anchors the view that the selloff is overdone relative to fundamental value.
Supporting evidence for the constructive stance includes: (1) revenue reaccelerated to 8.33% YoY in Q2 2026, reaching $1.570 billion; (2) the forward PE of 13.72x implies roughly 35% EPS growth to the analyst average estimate of $30.85, a reasonable multiple for a company with a 35.7% gross margin and 19.9% operating margin; (3) trailing twelve-month free cash flow of $866.6 million supports a conservative 24.4% dividend payout and the 50-year dividend increase streak; and (4) the PS ratio of 2.73x is near the low end of its historical range, suggesting the market is pricing in moderate growth rather than euphoria. The implied upside to the average analyst target of 24.6% compares favorably to the broader market's expected return, and the low beta of 0.835 offers downside cushioning.
Key risks that could invalidate the thesis include: (1) continued gross margin compression below 36%, which would undermine the forward EPS recovery; (2) a value-destructive Owens Corning acquisition that strains the balance sheet (debt-to-equity already 1.605) and dilutes returns; and (3) a cyclical downturn in commercial construction that reduces roofing demand. The rating would upgrade to Buy if gross margins stabilize above 36% and the forward PE remains below 15x, or if the Owens Corning deal is announced on accretive terms. It would downgrade to Sell if revenue growth decelerates below 5% or if free cash flow declines below $700 million on a trailing basis. Relative to its own history (PE range of 6.61x to 28.40x) and peers, CSL appears fairly valued to slightly undervalued at 18.52x trailing and 13.72x forward, with the discount to the historical PS band offering a margin of safety.
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CSL 12-Month Price Forecast
Carlisle presents a balanced risk/reward at the current price of $329.34, with the bear case having stronger near-term momentum evidence (15.8% one-year relative underperformance, 10.2% three-month decline) but the bull case resting on more compelling forward fundamentals (8.33% revenue growth, 13.72x forward PE, 24.6% analyst upside). The key tension is whether the Q2 2026 margin compression is temporary or structural; if gross margins recover above 36%, the forward EPS recovery is credible and the stock is undervalued, but if they continue declining, the forward multiple is a value trap. The Owens Corning acquisition speculation adds binary risk, and the leveraged balance sheet (debt-to-equity 1.605) leaves limited room for error. I would upgrade to bullish if Q3 2026 gross margins stabilize above 36% and the forward PE remains below 15x, or if the Owens Corning deal is announced on accretive terms; I would downgrade to bearish if revenue growth decelerates below 5% or if free cash flow falls below $700 million on a trailing basis.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carlisle Companies's 12-month outlook, with a consensus price target around $410.38 and implied upside of +29.0% versus the current price.
Average Target
$410.38
0 analysts
Implied Upside
+29.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$340 - $475
Analyst target range
Eight analysts cover Carlisle with a consensus recommendation of "buy" and a recommendation mean of 2.2, reflecting a moderately bullish stance. The average target price is $410.38, which implies approximately 24.6% upside from the current price of $329.34, a substantial expected return that suggests analysts view the recent selloff as overdone. The consensus leans bullish, with the institutional ratings history showing persistent Outperform and Overweight ratings from Baird, Oppenheimer, and JP Morgan, while Truist Securities has maintained a Hold rating, indicating some divergence in conviction but no outright bearish calls.
The target price range spans from a low of $340.00 to a high of $475.00, a spread of $135 or roughly 40% of the low target, which signals meaningful uncertainty about the company's trajectory. The high target of $475.00 implies roughly 44.2% upside and likely assumes successful execution on margin expansion, a favorable resolution to the Owens Corning acquisition speculation, and a recovery in commercial construction demand. The low target of $340.00 implies only 3.2% upside and likely prices in margin compression, integration risk from M&A, or a cyclical downturn in non-residential construction. The estimated EPS average of $30.85 for the forward period, against a forward PE of 13.72x, suggests analysts expect a significant earnings recovery, and the fact that no analysts have recently downgraded the stock despite the 10.2% three-month decline indicates that the selloff may be driven by sentiment rather than fundamental deterioration.
Bulls vs Bears: CSL Investment Factors
The bear case currently has stronger near-term evidence: CSL has underperformed the S&P 500 by 15.8 percentage points over one year, is down 10.2% over three months, and is trading at just 25.7% of its 52-week range with margin compression in Q2 2026. However, the bull case rests on forward-looking fundamentals that are more compelling: revenue reaccelerated to 8.33% YoY, the forward PE of 13.72x implies 35% EPS growth, and analysts see 24.6% upside to their $410.38 average target. The single most important tension is whether the margin compression is a temporary input-cost blip or the start of structural pricing pressure — if gross margins stabilize above 36%, the forward earnings recovery is credible and the stock is undervalued; if they continue declining, the 13.7x forward PE is a value trap. The Owens Corning acquisition speculation adds binary risk: a disciplined deal could catalyze a re-rating, while an overpriced one could destroy the capital allocation narrative that has driven 15.7% annualized returns since 1990.
Bullish
- Revenue reaccelerating at 8.3% YoY: Q2 2026 revenue of $1.570 billion grew 8.33% year-over-year versus $1.450 billion in Q2 2025, a notable acceleration from the soft second half of 2025 when Q3 and Q4 revenue were $1.347 billion and $1.128 billion respectively. The sequential jump from Q1 2026's $1.052 billion confirms the seasonal roofing upcycle is intact and that the company is scaling back up after a weak H2 2025.
- Analyst target implies 24.6% upside: The consensus average target price of $410.38 implies approximately 24.6% upside from the current $329.34, with a high target of $475.00 (44.2% upside) and a low of $340.00 (3.2% upside). Eight analysts maintain a 'buy' consensus with a recommendation mean of 2.2, and no downgrades have occurred despite the 10.2% three-month decline, suggesting the selloff is sentiment-driven rather than fundamental.
- Forward PE of 13.7x prices recovery: The trailing PE of 18.52x drops to a forward PE of 13.72x, implying the market expects roughly 35% EPS expansion to the analyst average estimate of $30.85. This forward multiple is moderate for a company with a 35.7% gross margin and 19.9% operating margin, and the PS ratio of 2.73x sits near the low end of its historical range.
- 50-year dividend streak with low payout: Carlisle just achieved 50 consecutive years of dividend increases, supported by a conservative 24.4% payout ratio and a 1.32% dividend yield. The company returned $250 million in buybacks and $44.4 million in dividends in Q2 2026 alone, demonstrating robust capital return capacity alongside a trailing twelve-month free cash flow of $866.6 million.
Bearish
- Relative underperformance vs. S&P 500: CSL has declined 0.79% over the past year while the S&P 500 gained 15.01%, and is down 10.20% over three months versus a 3.34% S&P gain, producing a 3-month relative strength of -13.54%. The stock sits at just 25.7% of its 52-week range ($293.43–$432.91), trading in the lower quartile and closer to its lows than highs.
- Margin compression year-over-year: Q2 2026 gross margin fell to 36.2% from 37.3% in Q2 2025, and operating margin declined to 22.4% from 23.1%, while net margin compressed to 16.25% from 17.65%. Despite 8.33% revenue growth, net income was essentially flat at $255.2 million versus $255.8 million a year earlier, indicating input cost or pricing pressure is offsetting top-line gains.
- Elevated leverage constrains flexibility: The debt-to-equity ratio of 1.605 and total debt to capitalization of 64.1% reflect a leveraged balance sheet from years of buybacks and acquisitions. The cash flow to debt ratio of 0.084 is low, leaving limited room for error if commercial construction demand weakens or if the reported Owens Corning acquisition proceeds and adds further leverage.
- Owens Corning deal uncertainty: Reports of a buyout offer for Owens Corning sent that stock up nearly 11%, but the deal is far from certain and would represent a transformational consolidation with significant integration risk. A failed or overpriced acquisition could pressure Carlisle's multiple, while a successful one would strain the balance sheet and dilute near-term returns.
CSL Technical Analysis
Carlisle is in a broad range-bound consolidation with a modestly negative bias, having declined 0.79% over the past year and 0.53% over six months, while the S&P 500 gained 15.01% and 17.35% over the same periods. At a current price of $329.34, the stock sits at approximately 25.7% of its 52-week range of $293.43 to $432.91, meaning it is trading in the lower quartile of its annual band and closer to its lows than its highs. This positioning reflects a stock that has lost momentum and is being treated as a relative laggard, though the proximity to the 52-week low also raises the question of whether this is a value opportunity or a falling knife, particularly given the 25.44% maximum drawdown from peak levels.
Short-term momentum is clearly negative and diverging from the already-weak longer-term trend: the stock is down 3.68% over the past month and 10.20% over three months, with the 3-month decline far exceeding the 1-year decline of 0.79%. This acceleration of losses suggests selling pressure has intensified recently rather than stabilized, and the relative strength figures confirm persistent underperformance, with 1-month relative strength of -4.27% and 3-month relative strength of -13.54% versus the S&P 500. The 1-month decline of 3.68% against a positive S&P 500 return of 0.59% indicates the stock is being sold on company-specific or sector-specific concerns rather than broad market weakness, and the divergence between the flat 1-year performance and the sharp 3-month drop signals that earlier gains have been fully erased by a recent leg down.
Key technical levels are well-defined: support sits at the 52-week low of $293.43, roughly 10.9% below the current price, while resistance is anchored at the 52-week high of $432.91, about 31.4% above current levels. A breakdown below $293.43 would signal a new leg lower and likely trigger momentum-driven selling, while a breakout above $432.91 would require a fundamental catalyst such as a confirmed transformative acquisition or a sharp earnings beat. With a beta of 0.835, Carlisle is roughly 16.5% less volatile than the broader market, which is unusual for a stock in a deep drawdown and suggests the decline is driven by fundamental repricing rather than high-beta market sensitivity, though the 3.28 short ratio indicates short sellers are not aggressively positioned against the name.
Beta
0.83
0.83x market volatility
Max Drawdown
-25.4%
Largest decline past year
52-Week Range
$293-$433
Price range past year
Annual Return
-2.1%
Cumulative gain past year
| Period | CSL Return | S&P 500 |
|---|---|---|
| 1m | -9.6% | +0.9% |
| 3m | -3.6% | +3.4% |
| 6m | -8.9% | +14.4% |
| 1y | -2.1% | +16.2% |
| ytd | -3.1% | +14.0% |
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CSL Fundamental Analysis
Carlisle's revenue trajectory is showing reacceleration, with Q2 2026 revenue of $1.570 billion growing 8.33% year-over-year versus $1.450 billion in Q2 2025, a notable improvement from the prior-year comparison. The sequential progression from Q1 2026 revenue of $1.052 billion to Q2 2026 revenue of $1.570 billion reflects the seasonal strength of the roofing business, and the Q2 2026 figure also exceeds Q3 2025 revenue of $1.347 billion and Q4 2025 revenue of $1.128 billion, confirming that the business is scaling back up after a soft second half of 2025. Segment data shows Carlisle Construction Materials generating $1.181 billion and Carlisle Weatherproofing Technologies contributing $389 million, meaning the roofing segment accounts for roughly 75% of revenue and remains the primary growth engine, while the smaller weatherproofing unit provides diversification but less scale leverage.
Profitability is robust and improving, with Q2 2026 net income of $255.2 million on a net margin of 16.25%, up from Q2 2025 net income of $255.8 million on a 17.65% margin, indicating that while absolute profits were roughly flat, the margin compressed modestly year-over-year. Gross margin in Q2 2026 was 36.2%, down from 37.3% in Q2 2025, and operating margin was 22.4% versus 23.1% a year earlier, suggesting some input cost or pricing pressure, though the trailing twelve-month gross margin of 35.7% and operating margin of 19.9% remain healthy for a building materials manufacturer. The company's Q1 2026 was seasonally weaker with net income of $127.7 million and a 12.1% net margin, but the Q2 rebound to 16.25% demonstrates the earnings power of the peak construction season and the company's ability to convert revenue into profit at scale.
Carlisle's balance sheet carries meaningful leverage with a debt-to-equity ratio of 1.605 and a current ratio of 3.094, indicating strong short-term liquidity but a leveraged capital structure that reflects years of share repurchases and acquisitions. Free cash flow on a trailing twelve-month basis is $866.6 million, and Q2 2026 free cash flow was $200.1 million after $41.7 million in capital expenditures, while the company returned capital aggressively through $250 million in stock repurchases and $44.4 million in dividends during the quarter. The return on equity of 41.26% is exceptionally high and reflects both strong profitability and the leverage effect, while the ROA of 10.81% confirms efficient asset utilization; however, the cash flow to debt ratio of 0.084 and the total debt to capitalization of 64.1% suggest that the company's debt load is substantial relative to its cash generation, leaving less room for error if construction demand weakens.
Quarterly Revenue
$1.6B
2026-06
Revenue YoY Growth
+8.3%
YoY Comparison
Gross Margin
36.2%
Latest Quarter
Free Cash Flow
$866600000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CSL Overvalued?
Because Carlisle is solidly profitable with positive net income of $255.2 million in Q2 2026 and trailing EPS of $6.31, the PE ratio is the appropriate primary valuation metric. The stock trades at a trailing PE of 18.52x and a forward PE of 13.72x, and the wide gap between these two figures implies the market expects meaningful earnings growth over the next twelve months, with the forward multiple pricing in roughly 35% EPS expansion. The PEG ratio of -0.48 is negative and therefore not meaningful as a growth-adjusted signal, which typically reflects the distortion from a low trailing earnings base or negative earnings growth in the calculation period.
Relative to the broader building materials and construction materials sector, Carlisle's trailing PE of 18.52x and forward PE of 13.72x appear reasonably valued rather than stretched, particularly given its 35.7% gross margin and 19.9% operating margin, which are above what many commodity-oriented construction materials peers achieve. The price-to-sales ratio of 2.73x and EV/EBITDA of 12.63x are moderate for a company with Carlisle's brand strength and specification-driven pricing power, though the price-to-book ratio of 7.63x is elevated and reflects the asset-light nature of the business and the accumulated effect of buybacks reducing book equity. The dividend yield of 1.32% with a payout ratio of 24.4% is conservative and sustainable, supporting the 50-year dividend increase streak without straining cash flow.
Historically, Carlisle's PE ratio has ranged widely, from a low of 6.61x in Q2 2024 to a high of 28.40x in Q1 2023, with the current 18.52x sitting near the middle of that multi-year band. The PS ratio of 2.73x is near the low end of its historical range, which has seen readings as high as 17.17x in Q1 2024 and as low as 6.96x in Q2 2022, though the recent restructuring and divestitures make direct historical comparisons less reliable. The current valuation suggests the market is pricing in moderate growth expectations rather than euphoria, and the discount to the stock's own historical PS band could represent a value opportunity if the company can sustain its revenue reacceleration and margin recovery.
PE
18.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 7x~28x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.6x
Enterprise Value Multiple
Investment Risk Disclosure
Carlisle's financial risk profile is dominated by its leveraged balance sheet and thin cash flow coverage. The debt-to-equity ratio of 1.605 and total debt to capitalization of 64.1% mean that a meaningful portion of the capital structure is debt-funded, while the cash flow to debt ratio of just 0.084 indicates that trailing twelve-month free cash flow of $866.6 million covers only a small fraction of the debt load. Although the current ratio of 3.094 provides strong short-term liquidity, the company's aggressive capital return program — $250 million in buybacks and $44.4 million in dividends in Q2 2026 alone — competes with debt service and potential M&A funding. If commercial construction demand weakens and EBITDA declines, the leverage ratio could deteriorate quickly, potentially pressuring the dividend growth streak that has just reached 50 years. Additionally, the Q2 2026 margin compression (gross margin down 110 basis points YoY to 36.2%, operating margin down 70 basis points to 22.4%) suggests limited buffer if input costs rise further.
Market and competitive risks center on valuation compression and cyclical demand. At a trailing PE of 18.52x and forward PE of 13.72x, CSL trades at a moderate multiple, but the price-to-book ratio of 7.63x is elevated and reflects the asset-light model and buyback-reduced equity; any deterioration in ROE (currently 41.26%) could trigger a de-rating. The stock's beta of 0.835 indicates lower volatility than the market, but its 3-month relative strength of -13.54% shows it is being sold on company-specific concerns, likely related to the Owens Corning acquisition speculation and commercial construction softness. Competitive disruption from alternative roofing materials or larger building products consolidators could erode Carlisle's specification-driven pricing power, while a failed Owens Corning deal could remove a potential catalyst and leave the stock without a near-term narrative. Sector rotation away from basic materials into higher-growth areas is also a persistent headwind, as evidenced by the 17.88% six-month relative underperformance versus the S&P 500.
The worst-case scenario would combine a cyclical downturn in non-residential construction with a failed or overpriced Owens Corning acquisition and continued margin compression. In this chain, revenue growth could stall, EBITDA could decline, and the leverage ratio could spike, forcing the company to cut buybacks or slow dividend growth. The stock's 52-week low of $293.43 represents a 10.9% decline from the current $329.34, and the analyst low target of $340.00 is actually above the current price, suggesting limited downside according to sell-side models. However, in a severe recession, the stock could retest its 52-week low and potentially overshoot to the $270–$280 range, implying a 15–18% loss from current levels. The maximum drawdown of 25.44% from peak already demonstrates the stock's capacity for sharp declines, and a breakdown below $293.43 would likely trigger momentum-driven selling toward the $250–$270 area, representing a 18–24% downside from the current price.
FAQ
The most severe risk is cyclical exposure to commercial construction, as roughly 75% of revenue comes from Carlisle Construction Materials, and a downturn in non-residential building activity would disproportionately impact the roofing segment. Second, margin compression is a growing concern: Q2 2026 gross margin fell to 36.2% from 37.3% a year earlier, and net income was flat despite 8.33% revenue growth, suggesting input cost or pricing pressure. Third, the leveraged balance sheet (debt-to-equity of 1.605, cash flow to debt of 0.084) limits financial flexibility, especially if the reported Owens Corning acquisition proceeds and adds further debt. Fourth, acquisition integration risk is binary: a failed or overpriced deal could destroy the capital allocation narrative that has driven 15.7% annualized returns since 1990, while a successful one would strain near-term returns. Ranked by severity: cyclical demand, margin compression, acquisition risk, and leverage.
The 12-month forecast is balanced with a neutral stance. The base case (50% probability) targets $340–$410, assuming revenue growth of 6–8%, stable gross margins around 36%, and EPS near $30.85, with the stock trading toward the analyst average target of $410.38. The bull case (30% probability) targets $410–$475, driven by margin recovery above 37%, double-digit revenue growth, and a favorable resolution to the Owens Corning speculation. The bear case (20% probability) targets $293–$340, reflecting a commercial construction downturn, gross margins below 35%, and a value-destructive acquisition. The most likely scenario is the base case, with the key assumption being that commercial construction demand remains stable and margin compression proves temporary. The analyst consensus 'buy' rating and 24.6% upside to the average target support a constructive but not aggressive outlook.
CSL appears fairly valued to slightly undervalued relative to its own history and peers. The trailing PE of 18.52x sits near the middle of its multi-year range (6.61x to 28.40x), while the forward PE of 13.72x implies significant earnings growth and is moderate for a company with a 35.7% gross margin and 19.9% operating margin. The PS ratio of 2.73x is near the low end of its historical range (as high as 17.17x in Q1 2024), and the EV/EBITDA of 12.63x is reasonable for a building products leader. The market is pricing in moderate growth expectations rather than euphoria, and the discount to the historical PS band could represent a value opportunity if revenue reacceleration and margin recovery continue. However, the elevated price-to-book ratio of 7.63x reflects the asset-light model and buyback-reduced equity, so book value is not a meaningful valuation anchor here.
From a risk/reward perspective, CSL is a reasonable buy for patient investors, but not a screaming bargain. The stock trades at $329.34, down 10.2% over three months and 0.79% over one year, while the S&P 500 gained 15.01% over the same period, creating a 15.8% relative underperformance. The analyst consensus is 'buy' with an average target of $410.38, implying 24.6% upside, and the forward PE of 13.72x suggests the market expects 35% EPS growth. However, the biggest downside risk is a retest of the 52-week low at $293.43, which would represent a 10.9% loss, and a severe recession could push the stock toward $270–$280. It is a good buy for long-term investors who believe in the commercial roofing replacement cycle and the company's pricing power, but short-term traders may find better momentum elsewhere.
CSL is better suited for long-term investment than short-term trading. The company has a 50-year dividend growth streak, a conservative 24.4% payout ratio, and a 1.32% dividend yield, making it an attractive income compounder for patient investors. The beta of 0.835 indicates lower volatility than the market, but the stock has a 25.44% maximum drawdown and is down 10.2% over three months, so short-term momentum is negative and timing is difficult. Earnings visibility is moderate: the roofing business is seasonal, and the Owens Corning acquisition adds binary uncertainty. A suggested minimum holding period is 2–3 years to allow the commercial construction cycle to recover, margin compression to resolve, and the acquisition situation to clarify. Short-term traders should note the stock is in the lower quartile of its 52-week range and lacks a near-term catalyst, making it a poor candidate for momentum strategies.