ECL
Ecolab Inc.$281.86
Sell
Target $240.94
Report: Mar 10, 2026Basic Materials • Chemicals - Specialty • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$281.86-14.5%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$240.94
(15% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$309.27
52 Week Low$221.62
Avg. 3 Month Volume1.42M
Efficiency
LTM Gross Margin44.5%
LTM EBITDA Margin23.3%
LTM EBIT Margin17.2%
LTM Operating Margin17.0%
LTM ROA8.8%
LTM ROE22.0%
LTM ROIC19.2%
LTM ROCE14.9%
Capital Structure
Market Cap (MM)$75.0B
Enterprise Value (MM)$83.2B
Shares Outstanding282.70M
Total Debt (MM)$8.83B
Cash & Equivalents (MM)$646.20M
LTM Net Debt (MM)$8.19B
LTM Net Debt/EBITDA2.2x
Growth
TTM Rev. Growth2.2%
Last 3-Yr Rev. CAGR4.3%
Last 3-Yr EBITDA CAGR14.3%
Last 3-Yr EPS CAGR24.2%
Valuation
Street Target Price$326.30
LTM EV/Revenue5.2x
LTM EV/Gross Profit11.6x
LTM EV/EBIT30.0x
LTM EV/EBITDA22.2x
LTM P/E36.1x
LTM EV/FCF42.5x
LTM P/FCF38.3x
LTM P/TB6.4x
LTM P/B7.7x
Dividend Yield1.0%
Payout Ratio36.6%
Executive SummarySituation: Current price is $281.86 versus fair value $240.94 (-14.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Operating Margin Disappointment: If the company fails to show the promised 100-150bps margin expansion in the next two quarters, the market will likely de-rate the multiple toward the peer median of 19x EV/EBITDA. Bear case centers on Moat Erosion in Legacy Segments: Low-cost competitors in the Institutional and Pest segments could force price concessions, impairing the company's 44.5% gross margin. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Explosive 30%+ growth in Global High-Tech and Digital segments driven by AI data center cooling demand; successful realization of $325M in 'One Ecolab' savings by 2027; expansion of the switching-cost moat through 1 million+ connected smart devices in Pest Elimination.
Bear Case
Unsustainable valuation multiple (38x P/E) for a business growing revenue at 2.2%; persistent operating margin compression (down 80bps) due to high integration costs and capex intensity; lack of management alignment evidenced by $20.6M in net insider selling over 12 months.
Key Catalysts
Near-Term (0-6 months)Impact: High
Operating Margin Disappointment: If the company fails to show the promised 100-150bps margin expansion in the next two quarters, the market...
Mid-Term (6-18 months)Impact: Critical
Slowing High-Tech Growth: A slowdown in semiconductor fab construction or data center cooling demand would invalidate the core bull thesis.
Long-Term (18+ months)Impact: Moderate
Ecolab is relevant for analysis now because it is trading near all-time highs ($281.86) while fundamental indicators like operating margin a...
Primary Risks
Concern: Medium
Moat Erosion in Legacy Segments: Low-cost competitors in the Institutional and Pest segments could force price concessions, impairing the co...
Concern: High
Integration Failure: The $3.7B Ovivo acquisition may fail to deliver the expected synergies, leading to further operating margin drag.
Concern: Medium
Stewardship is rated as 'Weak' due to the profound lack of insider alignment. With only 0.5% ownership and $20.6M in net sales by executives...
Recent Activity
2025-02-11SEC Filing (8-K)
+6.22%Ecolab reports strong Q4 2024 results with record full-year performance and raises 2025 EPS outlook.
2024-07-30SEC Filing (8-K)
-7.69%Ecolab reports Q2 2024 results with 3% sales growth and 35% adjusted EPS growth
2024-02-13SEC Filing (SC 13G/A)
+8.97%Vanguard Group reports 8.13% ownership of Ecolab Inc. common stock as of December 29, 2023.
2023-10-31SEC Filing (8-K)
+5.40%Ecolab delivers very strong third quarter performance with 18% adjusted EPS growth and raises 2024 outlook.
2023-02-14SEC Filing (8-K)
+7.11%Ecolab reports Q4 2022 results with strong operating performance and announces expanded cost savings program.
Valuation Table
9.8/10Decision Grade
Scenario Range
$153
Bear
$215
Base
$262
Bull
$282