How Carlisle Could Become a Powerhouse Stock

In many communities across the U.S., there's a lot of construction activity going on. Some of it is directed at commercial properties for companies looking to bolster their domestic operations. Some of it stems from housing shortages and the need for a more diversified inventory of homes in areas where population growth has exploded higher. Carlisle Companies (NYSE: CSL) has capitalized on these favorable trends by getting more of its insulation, waterproofing, and building envelope products used in both residential and commercial construction projects.

This series of articles has already looked at Carlisle's addressable market and the success that Carlisle has had in serving its customers. To complete this three-part series, here are the best arguments why Carlisle could see further growth from here as it becomes the latest part of the Voyager Portfolio.

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Vision 2030: The future of Carlisle

In its recent strategic planning initiatives, Carlisle has come up with a plan it calls Vision 2030. The general idea behind Vision 2030 is to foster growth through a variety of actions. They include the following:

• Using its internal Carlisle Operating System to maximize efficiency and operational excellence.
• Continuing to provide exceptional customer service as part of its Carlisle Experience.
• Pursuing innovation that in turn can drive organic growth opportunities for Carlisle's business.
• Making strategic acquisitions that can strengthen market share and add to Carlisle's product lines.
• Maintaining disciplined capital allocation policies that use free cash flow to make investments that will have high returns on capital.
• Attracting and retaining talented employees to help Carlisle move expeditiously toward reaching its goals.

Those standards are qualitative in nature, but Carlisle has also set some measurable goals. The company is seeking 5% organic revenue growth between now and 2030, maintaining free cash flow margins above 15% and margins based on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 25% or more. If it can achieve targeted returns on invested capital at or above 25%, then Carlisle sees itself having a solid chance to generate $40 in adjusted earnings per share. At recent prices, that implies a long-term forward earnings multiple of about 9, which is highly attractive in the current market environment.

How Carlisle can reach its goals

The details on Carlisle's execution plans aren't set in stone, but the company has a good idea how it will achieve its goals. Increased use of advanced automation and technology should help make Carlisle more efficient, with the express goal of cutting costs by 1% to 2% of revenue annually. Carlisle plans to boost research and development spending to come up with new products that will generate 25% of total revenue by 2030.

Already, acquisitions are aligning with the Vision 2030 strategy. Purchases of metal systems specialist MTL, insulation provider Plasti-Fab, and recycled denim insulation pioneer Bonded Logic are expected to generate significant synergy-related cost savings while also opening up new markets. Future targets are likely to flesh out Carlisle's business even further.

Why Carlisle is becoming part of the Voyager Portfolio

2025 hasn't been the ideal environment for construction. Labor shortages, increased caution, and stubbornly tight financing markets have caused some projects to get delayed. However, Carlisle expects demand for reroofing to remain strong, particularly as it's an absolute necessity for existing buildings with huge consequences if it's deferred.

Looking for long-term value has been a hallmark of the Voyager Portfolio so far. Recent share-price choppiness offers a strong opportunity to participate in a market with favorable trends. That's why I'll be buying Carlisle shares when mandated disclosure and trading guidelines allow, and I'm hoping that the company starts building up more upward momentum in 2026 and beyond.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.