Ecolab's Margin Momentum Amid Headwinds: Analyst Raises Price Target And Expects Easing Price/Cost Trends

Mizuho analyst Christopher Parkinson reiterated a Neutral rating on the shares of Ecolab Inc. ECL, raising the price target to $177 from $163.
Overall, pockets of strength remain within Institutional, Industrial, Life Sciences and other segments, but the global macro backdrop remains challenging and should continue to weigh on demand, especially in the 2H, the analyst notes.
Also Read: Ecolab Q1 Earnings Surpass Street View Amid Easing But Ongoing Inflationary Headwinds
The analyst expects margin momentum to build in FY23 despite these challenges on healthy price/cost trends.
However, pricing is expected to moderate as results lap with last year's strong acceleration and see ECL returning to normalized pricing actions in FY24, the analyst notes.
The analyst raises FY23 EPS estimates to $5.10 from $5.00. For FY24, Adjusted EPS estimates are raised to $6.05 from $6.00.
For FY23, EBITDA estimates are raised to $2.99 billion from $2.92 billion. For FY24, EBITDA estimates are raised to $3.27 billion from $3.25 billion.
Price Action: ECL shares are trading higher by 0.9% at $175.92 on the last check Wednesday.

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