Ecolab Returning As A Consistent Earnings Compounder, Says Analyst

Mizuho analyst John Roberts upgraded the shares of Ecolab Inc ECL from Neutral to Buy and raised the price target from $216 to $260.

According to the analyst, ECL appears back to its historical beat-and-raise visibility.

The analyst noted that the company had almost 25 years of meeting or exceeding quarterly consensus estimates before the pandemic. Meanwhile, the analyst added that ECL is not resilient against travel/hospitality collapses, which happened during the pandemic & immediately post-9/11. 

Greater cleanliness protects customer brands against infection outbreaks, and greater re-use of expensive utility/process water saves fresh water & energy usage, said the analyst about the high-ranking ESG model of the company's operations.

More consistent return-to-office and recovery in Asia tourism to U.S/Europe should drive cleaning chemical growth above trend in the near-term, observed the analyst.

The analyst expects ECL to continue to reinvest to sustain future growth through increased digitization and A.I., so that EPS growth post-2024 should be more trend line.

The analyst's 2024/2025/2026 EPS estimates remain unchanged at $6.35/$7.20/$7.95.

The analyst sees the company returning to being a consistent earnings compounder.

Price Action: ECL shares are trading lower by 0.39% at $219.89 on the last check Friday.

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