Carlisle Companies Incorporated CSL is poised to gain from momentum in the Carlisle Construction Materials segment, driven by robust demand for reroofing products and healthy construction activity. Strength in the non-residential construction market in the United States and Europe, driven by inventory normalization and growing re-roof activity as a result of pent-up demand, also bodes well. In the quarters ahead, CSL expects the non-residential construction market to continue benefiting as customers are undertaking several projects related to the replacement of older, existing roofs on non-residential structures. Backed by strong contractor backlogs and growing customer demand, the company expects the segment’s revenues to increase in the mid-single digits in 2025 from the year-ago period.

CSL has solidified its product portfolio and leveraged business opportunities through asset additions. In February 2025, the company completed the acquisition of ThermaFoam, which enabled it to incorporate ThermaFoam’s vertically integrated polystyrene capabilities into its Insulfoam EPS business. The buyout will expand CSL’s customer offerings and enhance its presence in Texas and the South-Central United States market. Its acquisition of Plasti-Fab (in December 2024) expanded its building envelope product portfolio and strengthened its position in the North American polystyrene insulation market. 

In May 2024, CSL completed the acquisition of MTL Holdings from the U.S. private equity firm, GreyLion Partners. The inclusion of MTL’s solid pre-fabricated edge metal products portfolio, supported by its strong designing and manufacturing capabilities, will enable Carlisle to expand its customer offerings and boost its architectural metals business.

The company’s shareholder-friendly policies are encouraging. In August 2024, CSL hiked its dividend by 18% to $1.00 per share. In 2024, it rewarded its shareholders with a dividend payment of $172.4 million, up 7.6% year over year. In the same period, it bought back shares worth $1.59 billion, up 76.2% year over year. At the end of fourth quarter, Carlisle was left to buy back 3.5 million shares.

Downsides of CSL

The ongoing challenges in the Carlisle Weatherproofing Technologies segment, owing to lower volumes from a slowdown in the residential construction market and project delays, are adversely affecting Carlisle’s performance. The slowdown in new housing, repair and remodel activities due to high interest rates, unfavorable weather conditions and affordability challenges is also concerning.

Carlisle has been dealing with the increasing raw material and labor costs. Not only is this pushing up its direct expenses, but it is also raising selling, administrative and R&D expenses. While current revenue growth rates are supporting the rising cost, they are largely driven by channel inventory filling. In 2024, its selling and administrative expenses and cost of sales increased 15.6% and 5.5%, respectively, year over year.

In the past year, this Zacks Rank #3 (Hold) company’s shares have lost 2.3% against the industry’s 11.3% growth.

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