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.

Show Full description

1.b. Last Insights on ECL

Ecolab Inc.'s recent performance was driven by strong Q4 earnings, with margin expansion and solid segment growth. The company's adjusted diluted EPS grew 15% to $2.08, beating estimates. Organic sales rose 3%, led by growth in Food & Beverage, Pest Elimination, and Life Sciences. A robust 2026 outlook, with adjusted diluted EPS expected to grow 12-15%, further supports the company's positive momentum. Institutional investors, such as Envestnet Asset Management Inc., have also increased their stakes, with a 2.4% boost in holdings.

1.c. Company Highlights

Last Price	308.36
Change Percentage	0.52%
Open	305.57
Previous Close	306.76
Market Cap ( Millions)	87339
Volume	863792
Year High	309.27
Year Low	221.62
M A 50	280.83
M A 200	271.29

FCF Yield	2.18%
Dividend Yield	0.87%
ROE	22.03%
Debt / Equity	96.50%
Net Debt / EBIDTA	251.78%
Price To Book	8.92
Price Earnings Ratio	41.97
Price To FCF	45.86
Price To sales	5.43
EV / EBITDA	27.55

2. Ecolab's Strong 2025 Performance and Promising 2026 Outlook

Ecolab delivered a robust financial performance in 2025, with record-breaking sales margins, earnings per share, and free cash flow. In Q4, the company reported 15% adjusted EPS growth, driven by accelerating underlying sales growth and continued strong OI margin expansion. Organic sales grew 3%, driven by 3% value pricing and positive volume growth. The actual EPS came out at $2.08, slightly beating estimates of $2.07. For 2026, Ecolab expects 3% to 4% organic sales growth, with growth accelerating as the year progresses, driven by strengthening volume growth.

Publication Date: Feb -11

                                    📋 Highlights
                                    Record 2025 Performance::
                                                Ecolab achieved record sales margins, EPS ($12-15% growth), and free cash flow, driven by total value delivered to customers.
Q4 Adjusted EPS Surge::
                                                15% adjusted EPS growth, supported by 3% organic sales growth (3% value pricing + volume) and margin expansion.
Growth Engines Momentum::
                                                20% of portfolio (global high-tech, pest, life sciences, Ecolab Digital) grew double-digits in 2025, expected to repeat in 2026.
2026 Guidance::
                                                3-4% organic sales growth, 100-150 bps OI margin expansion, and 12-15% EPS growth (including Ovivo acquisition impact).
Innovation & Margin Leverage::
                                                New solutions (directed chip cooling, AI CIPIQ) and $325M One Ecolab savings target (25-50 bps SG&A leverage) drive margin expansion.

                                

Financial Highlights and Guidance

Ecolab's growth engines, including global high-tech, pest elimination, life sciences, and Ecolab Digital, are expected to collectively grow double digits in 2026. The company also expects 100 to 150 basis points of OI margin expansion, resulting in 14% to 16% OI growth and EPS growth of 12% to 15%. The guidance suggests a continued strong performance, driven by the company's focus on innovation and its ability to deliver total value to customers.

Valuation and Growth Prospects

With a P/E Ratio of 40.78 and an expected revenue growth rate of 4.9% next year, Ecolab's valuation appears to be reasonable, considering its strong growth prospects. The company's ROE of 22.03% and ROIC of 11.23% indicate a strong ability to generate returns on equity and invested capital. The EV/EBITDA ratio of 28.26 suggests that Ecolab's enterprise value is reasonable relative to its EBITDA.

Operational Highlights and Innovation

Ecolab has a strong lineup of innovations for 2026, including directed chip cooling as a service to the data center market and CIPIQ, an AI-enabled digital solution for food and beverage. The company's focus on innovation and its ability to deliver total value to customers are expected to drive growth and margin expansion. As Christophe Beck mentioned, "the company's value model is based on a best-in-class approach, which combines scale, digital intelligence, and global service to help customers achieve peak performance."

Segment Performance and Outlook

The global water business is expected to reach 20% margins and move beyond in the coming years, driven by acceleration in global high-tech and recovering basic and paper industries. Life sciences is expected to grow double-digits in 2026, while pest elimination is expected to continue its strong trajectory. The company's focus on growth engines and innovation is expected to drive long-term growth and profitability.

3. NewsRoom

Best Dividend Aristocrats For March 2026

17:21

Source: seekingalpha.com

Aster Capital Management DIFC Ltd Increases Stock Position in Ecolab Inc. $ECL

10:42

Source: defenseworld.net

Ecolab Inc. $ECL Holdings Boosted by DNB Asset Management AS

10:00

Source: defenseworld.net

Ecolab Appoints Darrell Brown as Co-COO, Global Markets and Greg Cook as Co-COO, Global Businesses

Feb -25

Source: businesswire.com

Equitable Trust Co. Raises Position in Ecolab Inc. $ECL

Feb -24

Source: defenseworld.net

Lansforsakringar Fondforvaltning AB publ Grows Stock Position in Ecolab Inc. $ECL

Feb -23

Source: defenseworld.net

Ecolab Declares Cash Dividend

Feb -19

Source: businesswire.com

HighTower Advisors LLC Has $23.74 Million Holdings in Ecolab Inc. $ECL

Feb -19

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

Ecolab

A-Score: 5.2/10

Value: 1.2

Growth: 5.1

Quality: 6.2

Yield: 2.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

PPG

A-Score: 5.0/10

Value: 4.0

Growth: 2.8

Quality: 6.5

Yield: 5.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

Sherwin-Williams

A-Score: 4.9/10

Value: 1.7

Growth: 6.4

Quality: 6.0

Yield: 2.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

Air Products

A-Score: 4.4/10

Value: 4.8

Growth: 2.9

Quality: 2.1

Yield: 6.0

Momentum: 2.5

Volatility: 8.3

1-Year Total Return ->

IFF

A-Score: 4.4/10

Value: 5.4

Growth: 2.3

Quality: 3.1

Yield: 6.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

DuPont

A-Score: 3.5/10

Value: 6.9

Growth: 3.7

Quality: 3.7

Yield: 4.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

13.45%

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 Strong 2025 Performance and Promising 2026 Outlook

Financial Highlights and Guidance

Valuation and Growth Prospects

Operational Highlights and Innovation

Segment Performance and Outlook

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

308.36$

Current Price

308.36$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA