Carlisle Cos., which makes roofing and weatherproofing products for buildings, is the IBD Stock Of The Day. CSL stock was setting up in a base Thursday.
Carlisle's earnings growth has been ramping up, with Wall Street expecting strong profit gains in the years ahead. Oppenheimer analysts, in a research note last month, said growth for the company was "underappreciated," amid strong commercial re-roofing demand. The see gains even as concerns of rising costs and a downturn hang over the stock market.
CSL Stock Sets Up
Shares of Carlisle slid 2.6% to 256.87 in the stock market today. The stock was in a flat base with a 275.23 buy point. Investors also can view the pattern as a shallow cup base. In either case, the 272.68 early entry is just above Tuesday's high.
The relative strength line of CSL stock was also at a new high, as indicated by the blue dot in MarketSmith. Shares have a best-possible 99 Composite Rating. Their EPS Rating is 96.
CEO Chris Koch, during Carlisle's earnings call in early February, said he was optimistic about "a strong, multiyear re-roofing cycle." He cited pent-up demand from the pandemic and demand for more energy-efficient buildings.
Carlisle reported first-quarter results in late April that solidly beat expectations, with earnings up 209% and revenue 59% higher year over year. It was the fourth straight quarter of top- and bottom-line growth.
CSL stock rose after the report. Strong construction demand, again, helped lift the company's results, Carlisle said.
Carlisle In Variety Of Industry Segments
Carlisle makes things like single-ply roofing, waterproofing materials, wiring, optical fiber technology and equipment that handles the application of adhesives and coatings. Wall Street expects the company to earn $17.18 per share this year, $18.30 next year and $18.83 in 2024.
The Oppenheimer analysts, in their research note on CSL stock, said the company is "well positioned" for earnings gains this year and next year. However, they noted that recession anxieties could delay roofing projects.
Carlisle, on its April earnings call, also said that raw materials were getting more expensive. And it noted supply-chain constraints and short staffing within the construction industry. Carlisle said rising costs for raw materials would weigh on the company in the second half of the year.
