CSL - Embedded Expectations Analysis - 2021 08 13
Carlisle Companies Incorporated (CSL:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 19.7x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain stable, but management may have concerns about their Construction Materials (CCM) business, Henry Company acquisition, and sales backlog.Specifically, management may lack confidence in their ability to sustain the sales recovery in their Carlisle Construction Materials (CCM) business, meet customer expectations amid pent-up reroofing demand, and maintain Carlisle Operating System cost savings. Furthermore, they may have concerns about 2021 CCM sales volumes, supply chain headwinds, and the declines in their EBITDA margin. Additionally, they may lack confidence in their ability to effectively prioritize customers as they manage their backlog, make progress on their pipeline for the Carlisle Interconnect Technologies (CIT) medical platform, and meet seasonal expectations for Q3. Finally, management may be overstating the potential of their Henry Company acquisition.
Carlisle Companies designs, manufactures and markets commercial roofing, energy, agriculture, mining, construction, aerospace and defense electronics, medical technology, transportation, among others. The company's segments are: Carlisle Construction Material, which provides ethylene propylene diene monomer rubber, thermoplastic polyolefin and polyvinyl chloride membrane and metal roofing systems; Carlisle Interconnect Technologies, which provides wire, cable, connectors, contacts and cable assemblies, and satellite communication equipment; Carlisle Fluid Technologies, which provides liquid, powder, sealants and adhesives finishing equipment and system components; and Carlisle Brake and Friction.
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