Carlisle Stock Exhibits Strong Prospects Despite Persisting Headwinds

Carlisle Companies Incorporated CSL is poised to gain from the strong performance of the Carlisle Construction Materials (CCM) segment. Robust demand for reroofing products and healthy construction activity are driving the segment’s performance. Increase in sales in the non-residential construction market in the United States and Europe, driven by the acquisition of MTL and growing re-roof activity as a result of pent-up demand, also bodes well for the segment. The CCM segment’s revenues increased 2% year over year in the first quarter of 2025.

Over time, CSL has steadily strengthened its business through acquisitions. In February 2025, CSL completed the acquisition of ThermaFoam, incorporating the latter’s vertically integrated polystyrene capabilities into its Insulfoam EPS business. The acquisition also expanded customer offerings and enhanced CSL’s presence in Texas and the South-Central U.S. market. In December 2024, the company acquired Plasti-Fab, expanding its building envelope product portfolio. The buyout strengthened CSL’s position in the North American polystyrene insulation market. 

In May 2024, Carlisle acquired MTL Holdings from U.S. private equity firm GreyLion Partners. The addition of MTL’s robust portfolio of pre-fabricated edge metal products, backed by strong design and manufacturing capabilities, enhanced CSL’s architectural metals business and broadened its customer offerings. In the first quarter of 2025, acquisitions had a positive impact of 4.6% on sales.

The company believes in rewarding its shareholders handsomely through dividend payments and share buybacks. In the first three months of 2025, CSL’s dividend payments totaled $45.2 million, up 8.9% year over year. In the same period, it bought back shares worth $400 million, up 166.5% year over year. In August 2024, the company hiked its dividend by 18% to $1.00 per share. Carlisle rewarded its shareholders with a dividend payout of 172.4 million in 2024, up 7.7% year over year. The amount spent on share buyback totaled $1.59 billion in the same period, up 76.2% year over year.

In the past three months, this Zacks Rank #3 (Hold) company’s shares have gained 13.9% compared with the industry’s 1.9% growth.

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Downsides of CSL

Carlisle is experiencing weakness in its Carlisle Weatherproofing Technologies (CWT) segment. Lower volumes due to a slowdown in the residential construction market and project delays are adversely affecting the CWT segment. The slowdown in the new housing, repair and remodel activities, due to high interest rates, unfavorable weather conditions and affordability challenges, is concerning as well. In the first quarter of 2025, organic revenues from the segment fell 11.7% on a year-over-year basis.

Carlisle has been dealing with the adverse impacts of high selling, general and administrative expenses. In the first quarter, the company’s cost of sales increased 1.8% year over year due to increasing raw material and labor costs. Its selling and administrative expenses also increased 16.3% year over year in the same period. In 2024, CSL’s cost of sales and selling and administrative expenses increased 5.5% and 15.6%, respectively, year over year. Consequently, any slowdown in non-residential construction activity will be a big headwind for the company.

Stocks to Consider

Some better-ranked companies are discussed below:

Crown Holdings, Inc. CCK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CCK delivered a trailing four-quarter average earnings surprise of 16.3%. In the past 60 days, the Zacks Consensus Estimate for Crown Holdings’ 2025 earnings has increased 3.8%.

Broadwind, Inc. BWEN presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 61.1%.

In the past 60 days, the consensus estimate for BWEN’s 2025 earnings has increased 14.3%.

Federal Signal Corporation FSS presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 6.4%.

The Zacks Consensus Estimate for FSS’ 2025 earnings has increased 1.6% in the past 60 days.

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