Ecolab Inc. (ECL), headquartered in Saint Paul, Minnesota, provides water, hygiene, and infection prevention solutions and services. With a market cap of $70.1 billion, the company's services include food safety, sanitation, optimization of water and energy use, improvement of operational efficiency and sustainability.
Shares of this global leader in the cleaning and sanitation industry have slightly underperformed the broader market over the past year. ECL has gained 31.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.8%. In 2024, ECL’s stock rose 24.9%, compared to the SPX’s 25.8% rise on a YTD basis.
Narrowing the focus, ECL’s outperformance is apparent compared to the Global X Clean Water ETF (AQWA). The exchange-traded fund has gained about 19.2% over the past year. Moreover, ECL’s returns on a YTD basis outshine the ETF’s 12.2% gains over the same time frame.
On Oct. 29, ECL shares closed down more than 1% after reporting its Q3 results. Its adjusted EPS of $1.83 topped Wall Street expectations of $1.82. The company’s revenue was $4 billion, missing Wall Street forecasts of $4.02 billion. For Q4, ECL expects its adjusted EPS to be between $1.75 to $1.85. The company expects full-year adjusted EPS in the range of $6.60 to $6.70.
For the current fiscal year, ending in December, analysts expect ECL’s EPS to grow 27.6% to $6.65 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 25 analysts covering ECL stock, the consensus is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, two “Moderate Buys,” and 12 “Holds.”
This configuration is less bullish than a month ago, with 12 analysts suggesting a “Strong Buy.”
On Nov. 18, Barclays PLC (BCS) kept an “Overweight” rating and raised the price target on ECL to $300, implying a potential upside of 21.1% from current levels.
The mean price target of $280.11 represents a 13.1% premium to ECL’s current price levels. The Street-high price target of $310 suggests an upside potential of 25.2%.
