Ecolab Has 'Earnings Consistency,' Downside Risk Is 'Relatively Benign': Analyst

Shares of Ecolab Inc ECL were rising in early trading on Wednesday.

The downside risk to the company’s earnings seems “relatively benign,” given its business model and strategy, according to Piper Sandler.

The Ecolab Analyst: Charles Neivert initiated coverage of Ecolab with an Overweight rating and price target of $260.

The Ecolab Thesis: The company’s earnings trajectory has been mostly consistent, in sharp contrast to other companies in the sector, which face “substantial cyclicality,” Neivert said in the initiation note.

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Efforts to increase sustainability and reduce resource consumption “are taking on increasing importance within the customer base and ECL has a broad range of products and services to offer, which we think allows them to increase their engagement with almost every customer it currently serves,” the analyst stated.

“Our EBITDA estimate is above the 2025 consensus estimate of $3.76B based on our slightly more constructive outlook for key end markets, the increasing value of the products and services ECL brings to its customers, which in turn drive the company’s ability to raise prices in the future, and our belief that ECL should benefit from continuing multiple expansion as it drives its margin toward 20%,” he added.

ECL Price Action: Shares of Ecolab had risen by 0.26% to $228.04 at the time of publication on Wednesday.

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