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Ecolab Inc ECL

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Raising Ecolab FVE to $200 Despite Near-Term Impact From Texas Freeze; Shares Slightly Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Excluding the temporary impact of the Texas winter freeze that occurred in February, Ecolab's first-quarter results were in line with our general expectations for the year. We had expected the first half of the year to reflect a continued recovery from the COVID-19-related slowdown, with stronger second-half results. Management continues to expect 2021 adjusted EPS will be slightly above 2019 levels, excluding a $0.15 impact from the Texas storm, which we think this is achievable. With our long-term outlook for postpandemic growth and margin expansion largely unchanged, we raise our fair value estimate to $200 per share from $195, due largely to the time value of money since our last update. Our wide moat rating is unchanged.

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Company Profile

Business Description

Ecolab produces and markets cleaning and sanitation products for the hospitality, healthcare, and industrial markets. The firm is the global market share leader in this category with a wide array of products and services, including dish and laundry washing systems, pest control, and infection control products. The company has a strong hold on the U.S. market and is looking to increase its profitability abroad. Additionally, Ecolab serves customers in water, manufacturing, and life sciences end markets, selling customized solutions.

1 Ecolab Place
Saint Paul, MN, 55102
T +1 800 232-6522
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 44,000