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In the last reported quarter, the company’s adjusted earnings per share (EPS) of $1.50 matched the Zacks Consensus Estimate. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and broke even once, delivering an earnings surprise of 0.7%, on average.
Let’s see how things have shaped up for Ecolab prior to this announcement.
Ecolab’s Global Water
Effective first-quarter 2025, Ecolab’s Global Industrial segment was renamed Global Water and includes Light & Heavy (previously named Water), Food & Beverage, and Paper.
The segment witnessed a sales uptick in the first quarter of 2025 on a fixed currency basis, reflecting organic growth and the benefit from the acquisition of Barclay Water Management. Organic growth was primarily driven by continued solid growth in Light & Heavy and Food & Beverage. Light & Heavy’s growth was led by growth in high tech and solid gains in manufacturing and downstream, while new business gains in Food & Beverage (which leveraged the One Ecolab growth initiative) were also witnessed during the quarter. We expect Ecolab to continue to benefit from the Barclay Water Management acquisition and gain new businesses by leveraging its strengths in the second quarter of 2025.
On first-quarter 2025 earnings call, management stated that in Global Hi-Tech Water, business continued to be strong as Ecolab deployed breakthrough innovation to the significant and expanding market. Global High-Tech sales growth also accelerated, leveraging its innovation and global capability to develop water circularity for microelectronics production (known as pads) and high-performance cooling for data centers. These look very promising for the segment as we expect this momentum to have continued in the to-be-reported quarter, thereby boosting ECL’s performance.
ECL’s Global Pest Elimination
In first-quarter 2025, the segment benefited from attractive, targeted acquisitions in North America. Organic sales for Global Pest Elimination reflected growth across food & beverage, restaurants and hospitality. We expect the segment to continue to benefit in the second quarter from increased sales from the food & beverage, restaurants and hospitality units, while it derives synergies from its acquisitions in North America.
On the earnings call, management stated that Ecolab is currently shifting toward Pest Intelligence, which is remote monitoring of devices, mousetraps. It has completed for one of the major retailers, with very good results. This looks promising for the stock.
Other Factors Affecting Ecolab
Ecolab is currently integrating Institutional and healthcare units of its Global Institutional & Specialty segment and is on track to report performance solely on a consolidated basis. In the first quarter of 2025, the segment’s Specialty business delivered strong underlying sales growth. Both the Institutional and Specialty businesses drove strong new business wins and continued value pricing, significantly outperforming end market trends during the quarter.
Ecolab’s Global Life Sciences segment recorded good new business wins, which leveraged improving industry trends in the first quarter of 2025. Per management, the performance reflected the company’s continued investments in breakthrough innovation, global capabilities and capacity to capitalize on this attractive, long-term growth opportunity. These look promising for the stock as these trends are likely to have continued in second-quarter 2025, thereby driving up revenues.
However, Ecolab continued to face declining sales in the Global Institutional & Specialty segment’s fixed currency sales, reflecting the sale of the global surgical solutions business. The company continued to witness softer performance in food retail. These are likely to have weighed on its second-quarter performance. Also, the currently volatile macroeconomic environment stemming from tariff uncertainties raises our apprehension about the stock’s performance in the to-be-reported quarter.
ECL’s Estimate Picture
For second-quarter 2025, the Zacks Consensus Estimate of $4.01 billion for total revenues implies an improvement of 0.6% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.90, implying an improvement of 13.1% from the prior-year period’s reported number.
What Our Model Suggests About Ecolab
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: ECL has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Over the past three months, Ecolab’s shares have gained 12.8%, outperforming the Chemical - Specialty’s 7.4% rise. ECL’s shares outperformed the Zacks Basic Materials sector’s increase of 10.3% but underperformed the S&P 500’s gain of 15.2%.
Three Months Price Comparison
Image Source: Zacks Investment Research
Ecolab’s peers like Hawkins, Inc. (HWKN - Free Report) and Element Solutions Inc (ESI - Free Report) have outperformed the company, while Balchem Corporation (BCPC - Free Report) underperformed the company. HWKN and ESI’s shares are up 22.5% and 17.2%, respectively, while BCPC shares are down 1.9% in the same time frame.
Ecolab’s Key Valuation Metric
From a valuation standpoint, ECL’s forward 12-month price-to-earnings (P/E) is 33.3X, a premium to the industry's average of 23.4X.
Image Source: Zacks Investment Research
The company is trading at a discount to its peer, Hawkins. However, Ecolab is trading at a premium to its other peers like Balchem and Element Solutions. Hawkins’ P/E currently stands at 35.8X, while the ratios for Balchem and Element Solutions stand at 28.3X and 15.9X, respectively.
This suggests that investors may be paying a higher price relative to the company's expected sales growth.
ECL’s Long-Term Investment Visibility
Ecolab has made impressive progress within its Global Water business, including its efforts to grow its business through the acquisition of Barclay Water Management, helping enhance its water safety and digital monitoring solutions. This month, the company launched Ecolab RushReady, a new AI-powered program within its Ecolab KitchenIQ platform. Designed to help restaurants improve shift performance and profitability, RushReady combines real-time data, intelligent recommendations and human coaching to tackle the complexities of daily operations and elevate the overall experience for guests.
Last month, Ecolab announced the launch of its new solution, 3D TRASAR Technology for Direct-to-Chip Liquid Cooling. It is expected to help protect data center servers by monitoring coolant health indicators in real time, such as temperature, pH and flow rates. With this offering, Ecolab now covers the entire data center cooling landscape and uses AI-powered proprietary technology and powerful insights to deliver growth while reducing demand on vital natural resources. These developments are expected to significantly boost Ecolab’s business in the long run.
Our Final Take on Ecolab
There is no denying that ECL sits favorably in terms of core business strength, earnings prowess, robust financial footing and global opportunities. The stock’s strong core growth prospects are a good reason for existing investors to retain shares for potential future gains.
However, for those exploring to make new additions to their portfolios, the valuation indicates expectations of muted performance compared with its industry and sector peers. As it is still valued higher than the broader market, it does not suggest any potential room for growth until it can align more closely with overall market performance. As the chances of beating estimates are unlikely, it would be unwise to add the stock to one’s portfolio before the earnings. However, if investors are already holding the stock, it would be prudent to hold on to it at present. The favorable Zacks Style Score with a Growth Score of B suggests continued uptrend potential for Ecolab.
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Can Sustained Strength in Water Drive ECL Stock Before Q2 Earnings?
Key Takeaways
Ecolab, Inc. (ECL - Free Report) is scheduled to report second-quarter 2025 results on July 29, before the opening bell.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of $1.50 matched the Zacks Consensus Estimate. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and broke even once, delivering an earnings surprise of 0.7%, on average.
Let’s see how things have shaped up for Ecolab prior to this announcement.
Ecolab’s Global Water
Effective first-quarter 2025, Ecolab’s Global Industrial segment was renamed Global Water and includes Light & Heavy (previously named Water), Food & Beverage, and Paper.
The segment witnessed a sales uptick in the first quarter of 2025 on a fixed currency basis, reflecting organic growth and the benefit from the acquisition of Barclay Water Management. Organic growth was primarily driven by continued solid growth in Light & Heavy and Food & Beverage. Light & Heavy’s growth was led by growth in high tech and solid gains in manufacturing and downstream, while new business gains in Food & Beverage (which leveraged the One Ecolab growth initiative) were also witnessed during the quarter. We expect Ecolab to continue to benefit from the Barclay Water Management acquisition and gain new businesses by leveraging its strengths in the second quarter of 2025.
On first-quarter 2025 earnings call, management stated that in Global Hi-Tech Water, business continued to be strong as Ecolab deployed breakthrough innovation to the significant and expanding market. Global High-Tech sales growth also accelerated, leveraging its innovation and global capability to develop water circularity for microelectronics production (known as pads) and high-performance cooling for data centers. These look very promising for the segment as we expect this momentum to have continued in the to-be-reported quarter, thereby boosting ECL’s performance.
ECL’s Global Pest Elimination
In first-quarter 2025, the segment benefited from attractive, targeted acquisitions in North America. Organic sales for Global Pest Elimination reflected growth across food & beverage, restaurants and hospitality. We expect the segment to continue to benefit in the second quarter from increased sales from the food & beverage, restaurants and hospitality units, while it derives synergies from its acquisitions in North America.
On the earnings call, management stated that Ecolab is currently shifting toward Pest Intelligence, which is remote monitoring of devices, mousetraps. It has completed for one of the major retailers, with very good results. This looks promising for the stock.
Other Factors Affecting Ecolab
Ecolab is currently integrating Institutional and healthcare units of its Global Institutional & Specialty segment and is on track to report performance solely on a consolidated basis. In the first quarter of 2025, the segment’s Specialty business delivered strong underlying sales growth. Both the Institutional and Specialty businesses drove strong new business wins and continued value pricing, significantly outperforming end market trends during the quarter.
Ecolab’s Global Life Sciences segment recorded good new business wins, which leveraged improving industry trends in the first quarter of 2025. Per management, the performance reflected the company’s continued investments in breakthrough innovation, global capabilities and capacity to capitalize on this attractive, long-term growth opportunity. These look promising for the stock as these trends are likely to have continued in second-quarter 2025, thereby driving up revenues.
However, Ecolab continued to face declining sales in the Global Institutional & Specialty segment’s fixed currency sales, reflecting the sale of the global surgical solutions business. The company continued to witness softer performance in food retail. These are likely to have weighed on its second-quarter performance. Also, the currently volatile macroeconomic environment stemming from tariff uncertainties raises our apprehension about the stock’s performance in the to-be-reported quarter.
ECL’s Estimate Picture
For second-quarter 2025, the Zacks Consensus Estimate of $4.01 billion for total revenues implies an improvement of 0.6% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.90, implying an improvement of 13.1% from the prior-year period’s reported number.
What Our Model Suggests About Ecolab
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: ECL has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
ECL’s Share Price Performance
Over the past three months, Ecolab’s shares have gained 12.8%, outperforming the Chemical - Specialty’s 7.4% rise. ECL’s shares outperformed the Zacks Basic Materials sector’s increase of 10.3% but underperformed the S&P 500’s gain of 15.2%.
Three Months Price Comparison
Image Source: Zacks Investment Research
Ecolab’s peers like Hawkins, Inc. (HWKN - Free Report) and Element Solutions Inc (ESI - Free Report) have outperformed the company, while Balchem Corporation (BCPC - Free Report) underperformed the company. HWKN and ESI’s shares are up 22.5% and 17.2%, respectively, while BCPC shares are down 1.9% in the same time frame.
Ecolab’s Key Valuation Metric
From a valuation standpoint, ECL’s forward 12-month price-to-earnings (P/E) is 33.3X, a premium to the industry's average of 23.4X.
Image Source: Zacks Investment Research
The company is trading at a discount to its peer, Hawkins. However, Ecolab is trading at a premium to its other peers like Balchem and Element Solutions. Hawkins’ P/E currently stands at 35.8X, while the ratios for Balchem and Element Solutions stand at 28.3X and 15.9X, respectively.
This suggests that investors may be paying a higher price relative to the company's expected sales growth.
ECL’s Long-Term Investment Visibility
Ecolab has made impressive progress within its Global Water business, including its efforts to grow its business through the acquisition of Barclay Water Management, helping enhance its water safety and digital monitoring solutions. This month, the company launched Ecolab RushReady, a new AI-powered program within its Ecolab KitchenIQ platform. Designed to help restaurants improve shift performance and profitability, RushReady combines real-time data, intelligent recommendations and human coaching to tackle the complexities of daily operations and elevate the overall experience for guests.
Last month, Ecolab announced the launch of its new solution, 3D TRASAR Technology for Direct-to-Chip Liquid Cooling. It is expected to help protect data center servers by monitoring coolant health indicators in real time, such as temperature, pH and flow rates. With this offering, Ecolab now covers the entire data center cooling landscape and uses AI-powered proprietary technology and powerful insights to deliver growth while reducing demand on vital natural resources. These developments are expected to significantly boost Ecolab’s business in the long run.
Our Final Take on Ecolab
There is no denying that ECL sits favorably in terms of core business strength, earnings prowess, robust financial footing and global opportunities. The stock’s strong core growth prospects are a good reason for existing investors to retain shares for potential future gains.
However, for those exploring to make new additions to their portfolios, the valuation indicates expectations of muted performance compared with its industry and sector peers. As it is still valued higher than the broader market, it does not suggest any potential room for growth until it can align more closely with overall market performance. As the chances of beating estimates are unlikely, it would be unwise to add the stock to one’s portfolio before the earnings. However, if investors are already holding the stock, it would be prudent to hold on to it at present. The favorable Zacks Style Score with a Growth Score of B suggests continued uptrend potential for Ecolab.