Is It Time to Reassess Carlisle After 15.9% Share Price Drop?

If you’re reading this, you’re probably curious about whether it’s the right time to make a move with Carlisle Companies stock. With the share price closing most recently at $330.13, it’s natural to second-guess your next step, especially with the market throwing out mixed signals lately. On the one hand, Carlisle’s longer-term performance is impressive, up 176.2% over five years and still up 18.4% over three. But zoom into recent months and you’ll spot some turbulence, including a 15.9% dip over the last 30 days and a year-to-date drop of 9.9%. The one-year decline of 28.6% might give some investors pause, prompting questions about what’s actually driving these moves.

While the broader construction and industrial supply sectors are reassessing risk and growth potential amid shifting market trends, Carlisle’s fundamentals still look attractive. The company’s valuation score, a super straightforward way of measuring if the stock is undervalued, comes in at 5 out of 6, a signal that it remains undervalued in almost every major metric we usually check.

So how do these valuation checks work, and what do they really say about the stock’s outlook? Let’s break down Carlisle Companies’ numbers using standard approaches, then stick around for a fresh way to think about stock value that could change how you size up any investment.

Why Carlisle Companies is lagging behind its peers

Approach 1: Carlisle Companies Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model seeks to find a company’s intrinsic value by estimating all future cash flows it will generate, then discounting those projections back to today’s dollars. This approach aims to answer what Carlisle Companies is truly worth based on its future cash potential, not just its current earnings or assets.

Carlisle Companies’ most recent Free Cash Flow stands at $832 million. Analysts provide explicit estimates up through 2027, projecting Free Cash Flow to grow moderately each year and reach $893 million by 2027. Beyond that, projections are extrapolated by Simply Wall St and indicate continued steady increases, with Free Cash Flow expected to reach nearly $1.1 billion by 2035. All these figures are calculated in USD.

Taking these cash flow projections and discounting them appropriately, the DCF model places Carlisle Companies’ intrinsic fair value at $373.60 per share. With the current share price at $330.13, this implies the stock is trading at an 11.6% discount to its estimated intrinsic value. In simple terms, DCF analysis suggests that Carlisle Companies is undervalued at present levels.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Carlisle Companies.

Our Discounted Cash Flow (DCF) analysis suggests Carlisle Companies is undervalued by 11.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Carlisle Companies Price vs Earnings

For profitable companies like Carlisle, the Price-to-Earnings (PE) ratio is a popular and meaningful valuation metric. It gives investors a sense of how much they are paying for each dollar of the company’s earnings, making it a quick gauge of relative value.

What makes a PE “normal” or “fair” is not set in stone because it depends on factors like how much the company is expected to grow in the future and how risky its earnings are. A higher growth outlook or a stronger competitive position might justify a higher PE, while more risk or lower growth usually pulls it down.

Carlisle is currently trading at a PE of 17.5x. That is noticeably below the Building industry average of 22.1x, and peers are trading at an average of 21.6x. At first glance, this difference suggests Carlisle could be a bargain compared to the broader industry and its direct competitors.

Simply Wall St’s proprietary "Fair Ratio" takes this analysis further. It uses a custom model that goes beyond simple averages, factoring in not only Carlisle’s growth and earnings quality, but also its profit margins, industry specifics, risk profile, and market cap to estimate what multiple the stock truly deserves. In Carlisle’s case, the Fair Ratio comes out at 22.9x.

Comparing this Fair Ratio to the actual PE of 17.5x, the gap is meaningful. The stock is trading well below where the model suggests it should be, reinforcing the case that Carlisle Companies is attractively valued right now.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Carlisle Companies Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your unique story about a company; it’s how you connect the business outlook, key drivers, and real-world events to your own financial forecast for revenue, profits, and fair value. Instead of taking numbers at face value, Narratives help you map your perspective onto the company’s future and instantly see what that means for its valuation.

On Simply Wall St’s Community page, Narratives make this process easy and accessible for everyone; no spreadsheet expertise required. By linking your view of Carlisle Companies’ prospects to a set of future estimates, you generate a fair value that is immediately compared to the current share price, supporting buy or sell decisions. Because Narratives update whenever new news, data, or earnings are released, your outlook (and your fair value) always stays current.

For example, today's Community Narratives for Carlisle Companies include one with an optimistic fair value of $480, built on strong reroofing demand and insulation market expansion, and another more cautious take at $380, reflecting concerns about pricing pressure and competitive risk. This shows how one company can prompt totally different, yet valid, investment outlooks.

Do you think there's more to the story for Carlisle Companies? Create your own Narrative to let the Community know!

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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