- Wondering if Carlisle Companies at around US$339.87 is offering fair value right now, or if the recent price means you could be overpaying.
- The stock has been choppy, with a 1.4% decline over the last week, a 16.9% decline over the last 30 days, a 3.5% return year to date, and a 1.5% decline over the last year, while the 3 year and 5 year returns sit at 60.4% and 114.9% respectively.
- These mixed returns sit against a backdrop of ongoing coverage of Carlisle Companies as a capital goods and building related business. Investors are watching how its portfolio and capital allocation choices line up with long term demand for its products. Recent attention has focused less on short term headlines and more on whether the current share price still lines up with underlying fundamentals.
- Carlisle Companies currently holds a valuation score of 4 out of 6. The rest of this article will walk through what that means across different valuation methods, before finishing with a way to tie those numbers into a fuller view of the stock.
Find out why Carlisle Companies's -1.5% return over the last year is lagging behind its peers.
Approach 1: Carlisle Companies Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes Carlisle Companies future cash flow projections and discounts them back to today to estimate what the business might be worth in $ right now.
Carlisle Companies last twelve month Free Cash Flow sits at about $968.9 million. Analysts and extrapolated estimates point to Free Cash Flow of $882.7 million in 2026 and $1,002 million in 2028, with a series of projections running out to 2035 that gradually increase and are all discounted back using a 2 Stage Free Cash Flow to Equity framework.
Putting those projected cash flows together, the DCF model points to an estimated intrinsic value of about $410.04 per share. Against a current share price around $339.87, this implies the stock trades at roughly a 17.1% discount to that DCF estimate. This indicates that, on this cash flow view, Carlisle Companies appears to be trading below that modeled intrinsic value.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Carlisle Companies is undervalued by 17.1%. Track this in your watchlist or portfolio, or discover 58 more high quality undervalued stocks.
Approach 2: Carlisle Companies Price vs Earnings
For profitable companies, the P/E ratio is a useful way to relate what you pay per share to the earnings that each share generates. This helps you judge whether the price you see on screen feels reasonable for the underlying business.
What counts as a “normal” P/E will vary, because higher expected earnings growth or lower perceived risk can justify a higher multiple. Slower growth or higher risk usually point to a lower one. Carlisle Companies currently trades on a P/E of 18.7x, compared with the Building industry average of about 20.0x and a peer average around 19.5x.
Simply Wall St also calculates a proprietary “Fair Ratio” that estimates what Carlisle Companies P/E might be if the market were fully reflecting factors such as its earnings growth profile, profit margins, industry, market cap and risk. This Fair Ratio for Carlisle Companies is 25.6x, which aims to give a more tailored view than a simple comparison to peers or the sector. Since the current P/E of 18.7x sits meaningfully below this Fair Ratio, the stock screens as undervalued on this earnings based measure.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Carlisle Companies Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Think of a Narrative as your own clear story for Carlisle Companies that ties what you believe about its reroofing demand, sustainability focus, acquisitions, margins and risks into a forecast for revenue, earnings and profit margins, then into a fair value that you can compare with today’s price. All of this is available within an easy tool on Simply Wall St’s Community page that updates automatically when new news or earnings arrive. Different investors can see, for example, why one Narrative might point to fair value closer to the higher US$480 analyst target while another is closer to the lower US$380 estimate.
Do you think there's more to the story for Carlisle Companies? Head over to our Community to see what others are saying!
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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