Reasons Why You Should Avoid Betting on Carlisle Stock Right Now

Carlisle Companies Incorporated CSL failed to impress investors with its recent operational performance due to persistent weakness across residential and commercial construction markets, high debt levels and increasing operating costs.

CSL currently carries a Zacks Rank #4 (Sell). In the past year, the stock has lost 12% compared with the industry’s 3.4% decline.

Let’s discuss the factors that are likely to continue taking a toll on this company.

Segmental Weakness: Lower volumes from a slowdown in the residential and commercial construction markets and project delays are adversely affecting the Carlisle Weatherproofing Technologies (CWT) segment. The slowdown in the new housing, repair and remodel activities, due to high interest rates and affordability challenges, has been affecting the segment’s performance. Also, Carlisle is also experiencing a slowdown in the Carlisle Construction Materials (CCM) segment due to a decline in new construction activities and disruption in the distribution channel.

Rising Expenses: Carlisle has been dealing with the high 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 the first nine months of 2025, Carlisle’s cost of sales increased 3.4% year over year, while its selling and administrative expenses increased 3.8%.

High Debt Level: The company's high debt levels remain a concern. Its long-term debt balance at the end of the third quarter of 2025 remained high at $2.88 billion, reflecting a surge of 52.4% on a sequential basis. In August 2025, Carlisle completed the offering of $1 billion for its senior unsecured notes in aggregate. The offering comprises $500 million of 5.55% senior notes due to expire on Sept. 15, 2040, and $500 million of 5.25% senior notes due to expire on Sept. 15, 2035. We believe that the offering of senior notes will increase its debts and, in turn, might inflate its financial obligations and hurt profitability.

Forex Woes: Carlisle’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar is likely to require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry.

Stocks to Consider

Some better-ranked companies are discussed below:

Flowserve Corporation FLS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FLS delivered a trailing four-quarter average earnings surprise of 10.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 3%.

Helios Technologies, Inc. HLIO presently sports a Zacks Rank of 1. HLIO delivered a trailing four-quarter average earnings surprise of 16.8%.

In the past 60 days, the consensus estimate for Helios’ 2025 earnings has increased 1.7%.

Watts Water Technologies, Inc. WTS presently carries a Zacks Rank of 2. WTS delivered a trailing four-quarter average earnings surprise of 10.9%.

In the past 60 days, the consensus estimate for Watts Water’s 2025 earnings has increased 4.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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