Saint Paul, Minnesota-based Ecolab Inc. (ECL), with a market cap of $71 billion, offers water, hygiene, and energy technologies and services. It focuses on ensuring safe food, clean environments, and efficient water and energy use across global markets in the food, energy, healthcare, industrial, and hospitality sectors. Ecolab operates through its Global Industrial, Global Institutional & Specialty, Global Healthcare & Life Sciences, and Other segments.
Shares of Ecolab have comfortably outperformed the broader market over the past year. ECL has surged 37.8% over this time frame, while the broader S&P 500 Index ($SPX) is up 27.7%. In 2024, the stock is up 25.4%, compared to SPX’s 18% return on a YTD basis.
Narrowing the focus, ECL has surpassed the Global X Clean Water ETF’s (AQWA) 19.1% returns over the past year and 10% on a YTD basis.
Despite the robust price action over the past year, ECL stock dropped 7.7% on Jul. 30 following the release of its Q2 earnings. Its adjusted earnings were $1.68 per share, slightly above the $1.66 expected by analysts. However, the company’s revenue of $3.99 billion missed expectations of $4.03 billion. For the third quarter, Ecolab expects earnings between $1.75 and $1.85 per share, with full-year earnings projected in the range of $6.50 to $6.70 per share, up from the prior guidance of $6.40 - $6.70.
For the current fiscal year, ending in December, analysts expect Republic Services’ EPS to rise 27.6% year over year to $6.65. Moreover, the company’s earnings surprise history is solid. It exceeded the consensus estimate in each of the last four quarters.
Ecolab stock has a consensus “Moderate Buy” rating overall. Out of 24 analysts covering the stock, 10 rate it as a "Strong Buy," two suggest a “Moderate Buy,” and 12 advise a “Hold.”
This configuration is more bullish than a month ago, with seven analysts assigning the stock a “Strong Buy.”
On Aug. 21, RBC Capital reaffirmed its “Outperform” rating on Ecolab with a price target of $260. Despite fluctuating chemical prices, RBC Capital maintains a positive outlook on Ecolab, reflecting confidence in the company's ability to navigate these cost pressures.
The mean price target of $257.06 implies a premium of 3.4% from its current price level. The Street-high price target of $291 suggests an upside potential of 17%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
