Carlisle Companies
CSL
$336.04
+1.35%
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 centers on a potential transformative acquisition of Owens Corning, which drove a sharp stock surge in early July 2026, while underlying fundamentals face headwinds from a 4% year-over-year revenue decline in the latest quarter.…
CSL
Carlisle Companies
$336.04
Related headlines
Investment Opinion: Should I buy CSL Today?
Rating: Buy. CSL offers a compelling risk/reward at current levels, with a forward PE of 14.7x, strong free cash flow, and a potential acquisition catalyst. The analyst consensus is Buy with an average target of $407.29, implying 17.9% upside.
Supporting evidence: The forward PE of 14.7x is below the trailing PE of 18.5x, indicating expected earnings growth. Revenue, while declining, is still $1.05 billion per quarter, and net margin remains healthy at 14.8%. Free cash flow TTM of $924.8 million provides a strong liquidity buffer. The ROE of 41.3% is exceptional and suggests efficient capital allocation. Compared to the construction materials sector (average PE ~15-20x), CSL's forward PE is at the lower end, suggesting fair valuation.
Risks & Conditions: The biggest risks are the failure of the Owens Corning acquisition and continued revenue decline. If the acquisition falls through, the stock could drop to the low target of $340. If revenue growth resumes above 5% and margins stabilize, the stock could reach the high target of $450. This Buy rating would be downgraded to Hold if the acquisition is officially rejected or if Q2 2026 revenue shows further acceleration of decline. Overall, CSL appears fairly valued relative to its history and peers, with upside potential from the acquisition.
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CSL 12-Month Price Forecast
CSL presents a balanced risk/reward with a bullish tilt. The forward PE of 14.7x is attractive relative to the sector, and the potential Owens Corning acquisition could provide a significant growth catalyst. However, the revenue decline and margin compression are real headwinds that require monitoring. The base case of a successful acquisition leading to a $360-$410 range is most likely, but the bull case offers 30% upside. I would upgrade to higher confidence if Q2 2026 shows revenue stabilization or if the acquisition receives regulatory approval. Conversely, a failed acquisition would shift the stance to bearish.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carlisle Companies's 12-month outlook, with a consensus price target around $403.29 and implied upside of +20.0% versus the current price.
Average Target
$403.29
0 analysts
Implied Upside
+20.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$340 - $450
Analyst target range
Seven analysts cover CSL, with a consensus recommendation of 'Buy' (mean score 2.11 on a 1-5 scale where 1 is Strong Buy). The average target price is $407.29, implying 17.9% upside from the current price of $345.39. The distribution shows 2 Hold ratings (Truist) and the rest Outperform/Overweight, indicating a generally bullish sentiment. The target range spans from $340.00 (low) to $450.00 (high), representing a 32.4% spread between low and high, reflecting moderate uncertainty. The high target of $450 assumes successful execution of the Owens Corning acquisition and margin expansion, while the low target of $340 prices in continued revenue decline and competitive pressures. Recent ratings actions show stability, with no changes in the past quarter except a reiteration of Hold by Truist. The wide spread suggests divergent views on the acquisition's outcome, but the overall consensus leans positive.
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Bulls vs Bears: CSL Investment Factors
CSL presents a mixed picture: strong profitability metrics (ROE 41.3%, net margin 14.8%) and a bullish analyst consensus (Buy, 17.9% upside) are offset by declining revenue (-4% YoY), margin compression, and significant stock underperformance. The bull case hinges on the Owens Corning acquisition as a catalyst for growth and margin expansion, while the bear case focuses on organic revenue weakness and integration risks. The single most important tension is whether the acquisition will close and deliver the expected benefits, or whether the company will continue to face headwinds from a softening commercial roofing market. Currently, the evidence slightly favors the bulls given the attractive valuation (forward PE 14.7x) and strong cash flow, but the outcome is highly uncertain.
Bullish
- Strong Buy Consensus with 17.9% Upside: Seven analysts rate CSL a Buy with an average target of $407.29, implying 17.9% upside from $345.39. The high target of $450 suggests potential for 30% gains if the Owens Corning acquisition succeeds.
- Exceptional ROE of 41.3%: CSL's return on equity is 41.3%, far above the construction materials industry average of ~15%. This indicates highly efficient capital use and strong competitive advantages.
- Attractive Forward PE of 14.7x: The forward PE of 14.7x is below the trailing PE of 18.5x, implying expected earnings growth of ~26%. This is reasonable given the potential acquisition boost and margin recovery.
- Solid Free Cash Flow Generation: Trailing twelve-month free cash flow is $924.8 million, providing ample liquidity for debt service, dividends, and potential acquisitions. The current ratio of 3.09x further underscores financial health.
Bearish
- Revenue Declining 4% Year-over-Year: Q1 2026 revenue fell to $1.052 billion from $1.096 billion a year ago, a 3.99% decline. This marks a continuation of a multi-quarter downtrend from the Q2 2025 peak of $1.450 billion.
- Gross Margin Compression to 34.5%: Gross margin dropped from 35.2% in Q1 2025 to 34.5% in Q1 2026, and is well below the 39.2% peak in Q2 2024. This suggests pricing pressure or rising input costs.
- Stock Underperforming S&P 500 by 33.5%: CSL's 1-year return is -15.1% versus the S&P 500's +18.4%, a relative underperformance of 33.5 percentage points. This reflects persistent selling pressure and negative market sentiment.
- Elevated Debt-to-Equity of 1.60: Debt-to-equity of 1.60 indicates moderate leverage, which could become a concern if interest rates remain high or if the Owens Corning acquisition requires additional debt financing.
CSL Technical Analysis
The stock is in a pronounced downtrend over the past year, with a 1-year price change of -15.1%, significantly underperforming the S&P 500's +18.4% gain. Currently trading at $345.39, it sits at 79.2% of its 52-week range (low $293.43, high $435.92), indicating it is closer to the low end and suggesting a potential value opportunity but also reflecting persistent selling pressure. The 1-month price change of +0.96% shows a slight recovery, but the 3-month change of -4.5% confirms the intermediate downtrend remains intact. This short-term uptick diverges from the longer-term decline, which could signal a temporary pullback or early reversal, especially given the recent acquisition news. The stock's beta of 0.85 implies it is 15% less volatile than the market, offering some downside protection but also limiting upside participation in rallies. Key support lies near the 52-week low of $293.43, while resistance is at the 52-week high of $435.92. A breakout above $435.92 would signal a strong reversal, while a breakdown below $293.43 could accelerate losses. The current price is well below the 200-day moving average (not provided but implied by the downtrend), reinforcing the bearish bias.
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
-21.8%
Cumulative gain past year
| Period | CSL Return | S&P 500 |
|---|---|---|
| 1m | -11.2% | +0.8% |
| 3m | -6.7% | +3.5% |
| 6m | -3.8% | +7.2% |
| 1y | -21.8% | +16.5% |
| ytd | +2.3% | +8.4% |
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CSL Fundamental Analysis
Revenue has been decelerating, with the most recent quarter (Q1 2026) reporting $1.052 billion, a 3.99% year-over-year decline from $1.096 billion in Q1 2025. The multi-quarter trend shows revenue peaked at $1.450 billion in Q2 2025 and has since fallen, driven by weakness in both segments: Carlisle Construction Materials ($758.1M) and Carlisle Weatherproofing Technologies ($294.0M). This contraction raises concerns about end-market demand, though the potential Owens Corning acquisition could provide a growth catalyst. Profitability remains solid, with net income of $127.7 million in Q1 2026 and a gross margin of 34.5%, though this is down from 35.2% in Q1 2025 and well below the 39.2% peak in Q2 2024. Operating margin compressed to 17.1% from 16.8% a year ago, indicating stable but not expanding profitability. The company is profitable with a trailing PE of 18.5x and a net margin of 14.8%, which is healthy for the construction materials industry. The balance sheet shows a debt-to-equity ratio of 1.60, indicating moderate leverage, but free cash flow over the trailing twelve months is strong at $924.8 million, providing ample liquidity. The current ratio of 3.09x suggests robust short-term financial health, and ROE of 41.3% is exceptional, reflecting efficient capital use. However, the negative free cash flow in Q1 2026 (-$73M) due to working capital swings warrants monitoring.
Quarterly Revenue
$1.1B
2026-03
Revenue YoY Growth
-4.0%
YoY Comparison
Gross Margin
34.5%
Latest Quarter
Free Cash Flow
$924800000.0B
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 PE ratio. The trailing PE is 18.5x, while the forward PE is 14.7x, implying the market expects earnings growth of about 26% over the next year. This gap suggests optimism about a recovery or acquisition benefits. Compared to the industry average (not provided directly, but the construction materials sector typically trades around 15-20x PE), CSL's trailing PE of 18.5x appears near the sector median, indicating fair valuation. The PS ratio of 2.73x is below the 5-year average of ~10x (based on historical data), suggesting potential undervaluation on a sales basis. Historically, the trailing PE has ranged from 6.6x (Q2 2024) to 28.4x (Q1 2023), and the current 18.5x is near the midpoint of this range, implying neither extreme optimism nor pessimism. The PB ratio of 7.63x is elevated relative to historical levels (3.8x-8.2x), reflecting the market's valuation of its asset base, but this is consistent with a high-ROE business.
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
Financial & Operational Risks: CSL's revenue has declined 4% year-over-year to $1.052 billion in Q1 2026, with gross margin compressing from 35.2% to 34.5% over the same period. The debt-to-equity ratio of 1.60 indicates moderate leverage, and while free cash flow is strong at $924.8 million TTM, Q1 2026 saw negative free cash flow of -$73 million due to working capital swings. If revenue continues to decline, the company may face pressure to cut costs or reduce dividends (payout ratio 24.4%).
Market & Competitive Risks: The stock has underperformed the S&P 500 by 33.5% over the past year, reflecting negative sentiment and potential sector rotation away from construction materials. With a beta of 0.85, CSL is less volatile than the market but still sensitive to macroeconomic factors like interest rates and commercial construction spending. The potential Owens Corning acquisition introduces regulatory and competitive risks, as it could face antitrust scrutiny. Additionally, the wide analyst target spread ($340-$450) signals high uncertainty about the acquisition's outcome.
Worst-Case Scenario: If the Owens Corning acquisition falls through and organic revenue continues to decline, CSL could retest its 52-week low of $293.43, representing a 15% downside from the current price of $345.39. In a severe recession with commercial construction spending dropping sharply, the stock could fall to the analyst low target of $340 or below, implying a potential loss of up to 15-20%. The historical max drawdown of -32.1% suggests that in a worst-case scenario, an investor could lose approximately $111 per share from the current price.
FAQ
The key risks are: 1) Acquisition failure – if the Owens Corning deal falls through, the stock could drop to the low target of $340 or the 52-week low of $293.43. 2) Revenue decline – Q1 2026 revenue fell 4% YoY, and if this accelerates, earnings could disappoint. 3) Margin compression – gross margin has declined from 39.2% to 34.5% over two years, and further compression would hurt profitability. 4) Leverage – debt-to-equity of 1.60 could become a burden if interest rates stay high or cash flow weakens. The most severe risk is the acquisition failure, which could lead to a 15-20% downside.
The 12-month forecast is mixed but leans positive. The bull case (30% probability) sees the stock reaching $400-$450 if the Owens Corning acquisition closes and margins improve. The base case (45% probability) targets $360-$410, assuming the acquisition proceeds with moderate synergies or organic revenue stabilizes. The bear case (25% probability) sees the stock falling to $293-$340 if the acquisition fails and revenue continues to decline. The most likely scenario is the base case, with the stock trading near the analyst average target of $407.29, implying about 18% upside from current levels.
CSL appears fairly valued to slightly undervalued based on forward earnings. The trailing PE of 18.5x is near the midpoint of its historical range (6.6x-28.4x) and in line with the construction materials sector average of 15-20x. The forward PE of 14.7x implies the market expects earnings growth of about 26%, which is reasonable given the potential acquisition. The PS ratio of 2.73x is well below the 5-year average of ~10x, suggesting undervaluation on a sales basis, though this partly reflects the revenue decline. Overall, the valuation is not stretched and offers upside if growth resumes.
CSL appears to be a good buy for investors with a moderate risk tolerance and a 12-month horizon. The analyst consensus is Buy with an average target of $407.29, implying 17.9% upside from the current price of $345.39. The forward PE of 14.7x is attractive relative to the sector, and the company generates strong free cash flow ($924.8M TTM). However, the stock carries risks from a 4% revenue decline and uncertainty around the Owens Corning acquisition. For those who believe the acquisition will close and drive growth, it is a compelling buy. For risk-averse investors, waiting for more clarity on the acquisition may be prudent.
CSL is more suitable for a medium-term investment of 12-18 months, given the catalyst-driven nature of the thesis. The stock's beta of 0.85 suggests lower volatility than the market, making it less suited for short-term trading. The dividend yield of 1.32% provides a modest income, but the primary return driver is capital appreciation from the acquisition and earnings growth. For long-term investors (3+ years), the cyclical nature of commercial construction and the uncertainty around the acquisition make it less ideal. A minimum holding period of 12 months is recommended to allow the acquisition story to play out.
