Ecolab Inc. (ECL) | Investment Case

1. Company Snapshot

1.a. Company Description

Ecolab Inc.provides water, hygiene, and infection prevention solutions and services in the United States and internationally.The company operates through Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences segments.

The Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, metals and mining, power generation, pulp and paper, commercial laundry, petroleum, refining, and petrochemical industries.The Global Institutional & Specialty segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education, and retail industries.Its Global Healthcare & Life Sciences segment offers specialized cleaning and sanitizing products to the healthcare, personal care, and pharmaceutical industries, such as infection prevention and surgical solutions, and end-to-end cleaning and contamination control solutions under the Ecolab, Microtek, and Anios brand names.

The company's Other segment offers pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, educational and healthcare facilities, hotels, quick service restaurant and grocery operations, and other institutional and commercial customers.This segment also provides colloidal silica for binding and polishing applications in semiconductor, catalyst, and aerospace component manufacturing, as well as chemical industries; and products and services that manage wash process through custom designed programs, premium products, dispensing equipment, water and energy management, and reduction, as well as real time data management.It sells its products through field sales and corporate account personnel, distributors, and dealers.

The company was founded in 1923 and is headquartered in Saint Paul, Minnesota.

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1.b. Last Insights on ECL

Ecolab's recent performance was driven by strong Q2 earnings growth, with adjusted diluted EPS increasing 13% to $1.89. The company's revenue reached $4.03 billion, fueled by continued value pricing, volume growth, and productivity improvements. Organic sales grew 3%, led by strong growth in Institutional & Specialty segments. Margin expansion was a highlight, with management's focus on cost optimization and pricing strategies. The company maintains its 2025 adjusted diluted EPS outlook of $7.42-$7.62, indicating confidence in its growth prospects.

1.c. Company Highlights

Last Price	259.69
Change Percentage	-1.79%
Open	264.76
Previous Close	264.42
Market Cap ( Millions)	73615
Volume	1527985
Year High	286.04
Year Low	221.62
M A 50	268.1
M A 200	263.64

FCF Yield	2.11%
Dividend Yield	1.00%
ROE	21.65%
Debt / Equity	89.20%
Net Debt / EBIDTA	196.46%
Price To Book	7.58
Price Earnings Ratio	37.1
Price To FCF	47.39
Price To sales	4.63
EV / EBITDA	23.51

2. Ecolab's Q3 2025 Earnings: Strong Growth and Margin Expansion

Ecolab's third-quarter 2025 sales growth improved, driven by accelerating pricing and volume increases. The company's organic sales growth reached 4%, with pricing at 3% and volumes growing 1%. The growth engines, including Pest Elimination, Life Sciences, Global High-Tech, and Ecolab Digital, delivered double-digit organic growth, contributing to the overall performance. Adjusted diluted EPS came in at $2.07, in line with estimates. The company's operating income margin is on track to reach 20% by 2027, with 100 to 150 basis points of annual operating income margin expansion through 2030.

Publication Date: Oct -30

                                    📋 Highlights
                                    Third-Quarter Organic Sales Growth::
                                                Ecolab achieved 4% organic sales growth in core businesses (85% of total sales), driven by 3% pricing and 1% volume increases.
Growth Engines Outperform::
                                                Pest Elimination (6%), Life Sciences (6%), Global High-Tech (25%), and Ecolab Digital (25%) delivered double-digit organic growth, with High-Tech and Digital each surging 25%.
2025 EPS Guidance Raised::
                                                Adjusted diluted EPS midpoint increased to $7.53 ($7.48–$7.58), with 12–15% earnings growth projected for 2026+ due to margin expansion and operational efficiency.
Ovivo Acquisition Impact::
                                                Pending acquisition of Ovivo will double Global High-Tech revenue to $900 million, enhancing growth trajectory and diversification.
Underperforming Segments Recovery::
                                                Basic Industries and Paper (50% of Ecolab) expected to return to growth in 2026, with 4% top-line growth and 15% operating income growth ex-Paper/Basic Industries in 2025.

                                

Segment Performance

The growth engines continued to drive Ecolab's performance, with Pest Elimination achieving 6% organic sales growth, Life Sciences growing 6%, and Global High-Tech and Ecolab Digital delivering 25% sales growth. The company's Water business, excluding Paper and Basic Industries, saw 4% top-line growth and 15% operating income growth. The Life Sciences segment is recovering, with top-line growth accelerating and new business strong. Ecolab's hospitality business has grown nicely, driven by digital solutions and high margins.

Growth Strategy and Outlook

Ecolab's growth strategy, One Ecolab, continues to drive share gains and margin expansion across its core businesses. The company remains well-positioned to capitalize on organic and inorganic growth opportunities, driven by its strong and resilient free cash flow and extremely strong balance sheet. For 2026, Ecolab expects 3-4% top-line growth, positive volume, and 2-3% price growth, driving 12-15% EPS growth and at least 100 basis points of operating income margin expansion.

Valuation and Metrics

With a P/E Ratio of 36.78 and EV/EBITDA of 23.42, Ecolab's valuation suggests that the market is pricing in a certain level of growth. The company's ROE of 21.65% and ROIC of 11.51% indicate strong profitability. Analysts estimate next year's revenue growth at 5.4%, which is slightly higher than the company's guidance. The pending acquisition of Ovivo electronics is expected to more than double the size of Ecolab's Global High-Tech business, providing additional growth opportunities.

3. NewsRoom

Ecolab Increases Cash Dividend 12%

Dec -04

Source: businesswire.com

Ecolab Inc. $ECL Stock Holdings Lifted by Groupe la Francaise

Dec -04

Source: defenseworld.net

Ecolab Inc. $ECL Shares Purchased by Edgestream Partners L.P.

Dec -03

Source: defenseworld.net

Ecolab Inc. $ECL Position Lessened by Arrowstreet Capital Limited Partnership

Dec -03

Source: defenseworld.net

BLI Banque de Luxembourg Investments Has $1.10 Million Stock Position in Ecolab Inc. $ECL

Dec -01

Source: defenseworld.net

Choreo LLC Grows Stake in Ecolab Inc. $ECL

Nov -28

Source: defenseworld.net

AXQ Capital LP Sells 1,246 Shares of Ecolab Inc. $ECL

Nov -23

Source: defenseworld.net

American Century Companies Inc. Sells 9,742 Shares of Ecolab Inc. $ECL

Nov -23

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.90%)

6. Segments

Global Water

Expected Growth: 4.5%

Ecolab's growth is driven by increasing demand for water and energy conservation, and expanding presence in the healthcare and foodservice industries, leading to a forecasted growth rate of 4.5% CAGR.

Global Institutional & Specialty

Expected Growth: 5.2%

Growing demand for infection prevention products and services in healthcare, foodservice, and hospitality markets, driven by increasing concerns over public health and food safety, will drive growth for Ecolab’s water, hygiene and infection prevention products and services segment.

Global Healthcare & Life Sciences

Expected Growth: 6.3%

Increasing healthcare expenditure, rising incidence of hospital-acquired infections, and growing adoption of digital solutions drive Ecolab's growth in the water, hygiene, and infection prevention solutions segment.

Global Pest Elimination

Expected Growth: 4.5%

Ecolab's pest elimination segment is expected to grow driven by increasing demand for hygiene and sanitation services globally, particularly in the foodservice and hospitality sectors, as well as growing awareness of vector-borne diseases.

Unallocated Currency Impact

Expected Growth: 4.7%

Ecolab’s unallocated currency impact is driven by foreign exchange gains and losses not attributed to operating segments, resulting in a forecast CAGR of 4.7% due to increasing global trade and economic fluctuations.

7. Detailed Products

Water Treatment

Ecolab's water treatment solutions help to optimize water usage, reduce energy consumption, and minimize waste in industries such as manufacturing, mining, and oil and gas.

Institutional Cleaning

Ecolab's institutional cleaning solutions provide effective and sustainable cleaning products and services for industries such as hospitality, healthcare, and education.

Food Safety

Ecolab's food safety solutions provide comprehensive cleaning and sanitizing products and services to ensure food safety and quality in industries such as food processing, retail, and foodservice.

Pest Elimination

Ecolab's pest elimination solutions provide effective and sustainable pest control services to industries such as foodservice, hospitality, and healthcare.

Oil and Gas

Ecolab's oil and gas solutions provide specialized chemicals and services to optimize oil and gas production, transportation, and refining.

Paper and Textile

Ecolab's paper and textile solutions provide specialized chemicals and services to optimize paper and textile production, processing, and finishing.

Life Sciences

Ecolab's life sciences solutions provide specialized cleaning and sanitizing products and services to ensure compliance with regulatory requirements in industries such as pharmaceuticals and biotechnology.

8. Ecolab Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ecolab Inc. operates in a industry with moderate threat of substitutes. The company's products and services are moderately differentiated, and customers have some alternatives, but not many.

Bargaining Power Of Customers

Ecolab Inc. has a diverse customer base, and no single customer has significant bargaining power. The company's products and services are essential to its customers, giving it an upper hand in negotiations.

Bargaining Power Of Suppliers

Ecolab Inc. has a moderate level of bargaining power over its suppliers. The company relies on a few key suppliers for some of its raw materials, but it also has some alternative sources.

Threat Of New Entrants

The threat of new entrants in Ecolab Inc.'s industry is low due to high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry in Ecolab Inc.'s industry is high due to the presence of several large competitors, high fixed costs, and a slow growth rate.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	50.80%
Debt Cost	5.12%
Equity Weight	49.20%
Equity Cost	9.39%
WACC	7.22%
Leverage	103.27%

11. Quality Control: Ecolab Inc. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Air Products

A-Score: 5.2/10

Value: 3.6

Growth: 5.4

Quality: 4.2

Yield: 6.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

Ecolab

A-Score: 5.1/10

Value: 1.4

Growth: 5.1

Quality: 6.2

Yield: 2.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

PPG

A-Score: 4.7/10

Value: 3.7

Growth: 2.8

Quality: 6.2

Yield: 5.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

Sherwin-Williams

A-Score: 4.6/10

Value: 1.4

Growth: 6.4

Quality: 5.9

Yield: 2.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

DuPont

A-Score: 4.6/10

Value: 4.9

Growth: 3.7

Quality: 4.3

Yield: 4.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

IFF

A-Score: 4.3/10

Value: 5.1

Growth: 2.3

Quality: 3.4

Yield: 6.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

12.77%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.22%

Ecolab Inc. - US2788651006

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ECL

1.c. Company Highlights

Less Volatile

Expensive

Average Quality

Strong Momentum

Revenues Miss

Stable Momentum

Revenues Beats

2. Ecolab's Q3 2025 Earnings: Strong Growth and Margin Expansion

Segment Performance

Growth Strategy and Outlook

Valuation and Metrics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.90%)

6. Segments

Global Water

Expected Growth: 4.5%

Global Institutional & Specialty

Expected Growth: 5.2%

Global Healthcare & Life Sciences

Expected Growth: 6.3%

Global Pest Elimination

Expected Growth: 4.5%

Unallocated Currency Impact

Expected Growth: 4.7%

7. Detailed Products

Water Treatment

Institutional Cleaning

Food Safety

Pest Elimination

Oil and Gas

Paper and Textile

Life Sciences

8. Ecolab Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Ecolab Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

259.69$

Current Price

259.69$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA