Carlisle Companies (CSL) Margin Compression Challenges Bullish Earnings Narratives

Carlisle Companies (CSL) closed out FY 2025 with Q4 revenue of US$1,127.7 million and basic EPS of US$3.21, alongside net income excluding extra items of US$133.4 million. This gives investors a clear view of its core earnings power. Over the last six reported quarters, the company has seen quarterly revenue move between US$1,095.8 million and US$1,449.5 million, while basic EPS has ranged from roughly US$3.16 to US$5.93. This sets the backdrop for how the latest results fit into its recent track record. With earnings forecasts pointing to moderate growth and margins having compressed over the past year, this update puts the focus on how effectively Carlisle can protect profitability from here.

See our full analysis for Carlisle Companies.

With the headline numbers on the table, the next step is to see how this earnings report aligns with the widely followed narratives around Carlisle’s growth prospects, margin pressure, and risk profile, and where those perspectives might need to be reconsidered.

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Margins Slip From 17.3% To 14.8%

• Trailing net profit margin stands at 14.8%, down from 17.3% a year earlier, alongside trailing net income excluding extra items of US$742.5 million on US$5.0b of revenue.
• What stands out for a bearish narrative is the combination of softer profitability and earnings, as trailing net income excluding extra items moved from US$892.6 million to US$742.5 million while margin compressed. Bearish investors point to this as a sign that recent performance is weaker than the five year earnings growth rate of 15.9% a year.
  • This pressure on margins sits alongside forecasts that earnings grow about 5.7% a year and revenue about 3.1% a year, which is slower than the 10.1% a year revenue forecast for the broader US market.
  • Critics also flag the high level of debt in the risk summary as a concern when profitability is softer, because it gives the company less room if margins stay closer to 14.8% than the prior 17.3% level.

🐻 Carlisle Companies Bear Case

Five Year EPS Growth At 15.9% A Year

• Over the last five years, earnings have grown at an average rate of 15.9% a year, even though the most recent year showed negative earnings growth relative to that multi year trend.
• Bullish style arguments lean on this longer term record, because the company produced trailing basic EPS of US$17.35 on US$5.0b of revenue while forecasts still call for around 5.7% annual earnings growth. Supporters see this as evidence that the business has previously scaled profits over time even if the latest period was softer.
  • Looking at the quarterly data, basic EPS in FY 2025 ranged from about US$3.16 in Q1 to US$5.93 in Q2 on quarterly revenue between US$1,095.8 million and US$1,449.5 million, showing that the business has been able to earn solid profits across different demand levels.
  • Backers argue that a trailing twelve month revenue base near US$5.0b provides a sizeable platform for any future improvement in profitability, especially if margins recover closer to historical levels.

P/E Of 22.2x With DCF At US$325.38

• Carlisle trades on a trailing P/E of 22.2x, which sits slightly below the 22.9x peer average but above the 21.5x US Building industry, while the current share price of US$395.36 is higher than the US$325.38 DCF fair value reference.
• For a more balanced narrative, valuation signals are mixed. On one hand the P/E is only marginally different from peers, yet the share price sits above the DCF fair value and earnings and revenue are forecast to grow at 5.7% and 3.1% a year, which is slower than the broader US market revenue forecast of 10.1% a year.
  • Supporters may argue that a five year earnings growth rate of 15.9% a year helps explain why the market is comfortable with a 22.2x P/E even as near term growth is more modest.
  • On the other side, cautious investors highlight that margins have moved from 17.3% to 14.8% while the stock trades above the DCF fair value, which can make future operating performance more important in justifying the current valuation.

📊 Read the full Carlisle Companies Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Carlisle Companies's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Carlisle’s weaker margins, slower forecast growth than the broader US market, and higher share price than the DCF reference highlight pressure on both profitability and valuation.

If you are uneasy about paying up when growth looks modest and margins are under strain, use our these 867 undervalued stocks based on cash flows to focus on companies where price better reflects their earnings profile right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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