Based in Saint Paul, Minnesota, Ecolab Inc. (ECL) is a leading provider of water, hygiene, and infection prevention solutions across various industries such as healthcare, food and beverage, and hospitality. With a market cap of $68.6 billion, the company operates globally through Global Industrial; Global Institutional & Specialty; and Global Healthcare & Life Sciences segments.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Ecolab fits this criterion perfectly. Ecolab is renowned for its unmatched global reach and expertise in delivering science-based solutions that enhance operational efficiency, sustainability, and safety across over 40 industries.
However, the water solutions company is trading slightly below its 52-week high of $243.37 hit on June 12. Despite this, shares of Ecolab have climbed 5.4% over the past three months, overshadowing the broader Dow Jones Industrials Average's ($DOWI) marginal dip over the same time frame.
Longer term, ECL has risen 20.4% on a YTD basis, significantly outperforming the DOWI's 2.1% gains. Moreover, shares of Ecolab have surged 31.2% over the past 52 weeks, compared to the DOWI’s 12.2% returns over the same time frame.
ECL has shown a bullish trend, consistently trading above its 200-day moving average since November last year and also remained above its 50-day moving average during the period despite a few fluctuations.
Ecolab has outperformed the broader markets due to robust earnings growth fueled by effective cost management, strategic price increases to offset inflationary pressures, and impressive organic revenue growth within its core segments of water, hygiene, and infection-prevention services.
Plus, the stock rose nearly 2% on Apr. 30 following the announcement of Q1 earnings results. This rise was spurred by the strategic decision to divest its global surgical solutions business for $950 million, aimed at sharpening its focus on high-quality operations within the global healthcare sector. Additionally, the company raised its full-year 2024 profit forecast, underscoring its optimistic outlook for future performance.
To emphasize the stock's outperformance, Ecolab has shown significant double-digit returns in both YTD basis and over the past 52 weeks, contrasting with its rival Nutrien Ltd. (NTR), which has declined 10.7% and 16.3% in the respective periods.
Despite the stock's impressive gains, analysts are cautiously optimistic about its prospects. With a consensus “Moderate Buy” rating from the 23 analysts covering the stock, and the mean price target of $247.82 suggests a premium of just 3.2% to current levels.
On the date of publication, Sohini Mondal 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.
