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Here's Why You Should Retain Ecolab Stock in Your Portfolio Now
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Key Takeaways
Ecolab's Q3 2025 results topped expectations with strong sales and earnings growth.
Global High-Tech and Digital Platform segments delivered more than 30% sales gains and rising margins.
Ongoing R&D focus and portfolio reshaping continue to drive high-margin, tech-led expansion.
Ecolab Inc. (ECL - Free Report) has been gaining from its solid product portfolio. The optimism, led by a solid third-quarter 2025 performance and continued focus on research and development, is expected to contribute further. However, concerns regarding macroeconomic factors persist.
This Zacks Rank #3 (Hold) stock has gained 5.3% in the last six-month period compared with the industry’s 0.2% growth. The S&P 500 Composite has increased 11.5% during the same time frame.
The renowned water, hygiene and infection prevention solutions and services provider has a market capitalization of $80.35 billion. It projects 13.7% growth for the next five years and expects to maintain a strong performance in the future. Ecolab’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 0.27%.
Image Source: Zacks Investment Research
Reasons Favoring Ecolab’s Growth
Ecolab’s Global High-Tech Business & Digital Platform: Ecolab is accelerating its transformation through two high-growth, high-margin drivers: Global High Tech and Ecolab Digital. In the second quarter, the Global High-Tech segment posted more than 30% sales growth, fueled by rising demand for data center cooling and water circularity solutions in microelectronics. Operating margins now exceed 20%, highlighting strong scalability and profitability, with management calling it the start of a long runway growth opportunity.
Ecolab Digital also delivered nearly 30% sales growth, reaching an annualized revenue run rate of about $380 million. Growth was driven by subscription services and digital hardware, expanding recurring revenues and strengthening Ecolab’s positioning in efficiency, water management and sustainability-focused industries.
Strong Product Portfolio With a Focus on R&D: Ecolab’s diversified portfolio across water treatment, hygiene, life sciences, digital technologies, and pest control positions it strongly for sustained growth, supported by consistent R&D investments. The global water treatment market, valued at $38.56 billion in 2023, is projected to expand at an 8.1% CAGR through 2030, providing ample expansion opportunities.
In the second quarter, the company reported progress in reshaping its portfolio by exiting non-core, low-margin segments in hospital and retail to concentrate on higher-value areas. Pest Elimination continues to outperform through its digital intelligence model, while Life Sciences sustains robust momentum across biopharma, pharma, and personal care, maintaining operating margins near 30%.
Ecolab is also advancing its innovation-led strategy through cutting-edge solutions like the 3D TRASAR AI Dishmachine Program, which applies IoT and machine learning to cut water usage, and the 3D Cloud platform, which uses real-time analytics to optimize water treatment. These initiatives, alongside its disciplined portfolio management, highlight Ecolab’s focus on strengthening its competitive edge and driving growth in high-margin, high-tech markets.
Strong Q3 Results: ECL exited the third quarter of 2025 with better-than-expected results. The company registered a robust year-over-year uptick in its top line, along with solid performances across all segments. The expansion of both margins bodes well for the stock.
Per management, the performance in Ecolab’s core businesses was led by a mid-single-digit rally in Institutional & Specialty, and accelerating Food & Beverage growth, as the company leveraged its innovations and the One Ecolab enterprise growth strategy. The company’s growth engines (which include Life Sciences, Pest Elimination, Global High-Tech and Ecolab Digital) collectively grew sales in the double digits. This looked promising for the stock.
A Factor That May Offset ECL’s Gains
Macroeconomic Factors: Ecolab operates in 170 countries, which is why its operations are subjected to unfavorable social, political and economic challenges that may be ongoing in various countries. Per the second-quarter earnings call, management acknowledged several macroeconomic challenges that are creating near-term headwinds. Tariffs and tariff-related inflation remain a pressure point, with commodity costs running in the low to mid-single-digit range and expected to persist through the back half of the year.
The company also pointed to softer demand in paper and basic industries, which weighed on its performance compared with more resilient sectors. In addition, foreign exchange movements are expected to have an unfavorable impact on expenses relative to last year.
Estimate Trend
Ecolab is witnessing a negative estimate revision trend for 2026. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved south by 3 cents to $8.43 per share.
The Zacks Consensus Estimate for the company’s fourth-quarter 2025 revenues is pegged at $4.19 billion, indicating a 4.7% improvement from the year-ago quarter’s reported number.
Estimates for IDEXX’s 2025 earnings per share (EPS) have remained constant at $12.93 in the past 30 days. Shares of the company have risen 12.6% in the past year compared with the industry’s 11.1% growth. IDXX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.1%. In the last reported quarter, it delivered an earnings surprise of 8.3%.
Boston Scientific shares have gained 2.9% in the past year. Estimates for the company’s 2025 EPS have remained constant at $3.04 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.4%. In the last reported quarter, it posted an earnings surprise of 5.6%.
STERIS shares have risen 9.1% in the past year. Estimates for the company’s 2025 EPS have increased by 2 cents to $10.23 in the past 30 days. STE’s earnings topped estimates in three of the trailing four quarters and matched on one occasion, delivering an average surprise of 2.6%. In the last reported quarter, it posted an earnings surprise of 2.6%.
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Here's Why You Should Retain Ecolab Stock in Your Portfolio Now
Key Takeaways
Ecolab Inc. (ECL - Free Report) has been gaining from its solid product portfolio. The optimism, led by a solid third-quarter 2025 performance and continued focus on research and development, is expected to contribute further. However, concerns regarding macroeconomic factors persist.
This Zacks Rank #3 (Hold) stock has gained 5.3% in the last six-month period compared with the industry’s 0.2% growth. The S&P 500 Composite has increased 11.5% during the same time frame.
The renowned water, hygiene and infection prevention solutions and services provider has a market capitalization of $80.35 billion. It projects 13.7% growth for the next five years and expects to maintain a strong performance in the future. Ecolab’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 0.27%.
Image Source: Zacks Investment Research
Reasons Favoring Ecolab’s Growth
Ecolab’s Global High-Tech Business & Digital Platform: Ecolab is accelerating its transformation through two high-growth, high-margin drivers: Global High Tech and Ecolab Digital. In the second quarter, the Global High-Tech segment posted more than 30% sales growth, fueled by rising demand for data center cooling and water circularity solutions in microelectronics. Operating margins now exceed 20%, highlighting strong scalability and profitability, with management calling it the start of a long runway growth opportunity.
Ecolab Digital also delivered nearly 30% sales growth, reaching an annualized revenue run rate of about $380 million. Growth was driven by subscription services and digital hardware, expanding recurring revenues and strengthening Ecolab’s positioning in efficiency, water management and sustainability-focused industries.
Strong Product Portfolio With a Focus on R&D: Ecolab’s diversified portfolio across water treatment, hygiene, life sciences, digital technologies, and pest control positions it strongly for sustained growth, supported by consistent R&D investments. The global water treatment market, valued at $38.56 billion in 2023, is projected to expand at an 8.1% CAGR through 2030, providing ample expansion opportunities.
In the second quarter, the company reported progress in reshaping its portfolio by exiting non-core, low-margin segments in hospital and retail to concentrate on higher-value areas. Pest Elimination continues to outperform through its digital intelligence model, while Life Sciences sustains robust momentum across biopharma, pharma, and personal care, maintaining operating margins near 30%.
Ecolab is also advancing its innovation-led strategy through cutting-edge solutions like the 3D TRASAR AI Dishmachine Program, which applies IoT and machine learning to cut water usage, and the 3D Cloud platform, which uses real-time analytics to optimize water treatment. These initiatives, alongside its disciplined portfolio management, highlight Ecolab’s focus on strengthening its competitive edge and driving growth in high-margin, high-tech markets.
Strong Q3 Results: ECL exited the third quarter of 2025 with better-than-expected results. The company registered a robust year-over-year uptick in its top line, along with solid performances across all segments. The expansion of both margins bodes well for the stock.
Per management, the performance in Ecolab’s core businesses was led by a mid-single-digit rally in Institutional & Specialty, and accelerating Food & Beverage growth, as the company leveraged its innovations and the One Ecolab enterprise growth strategy. The company’s growth engines (which include Life Sciences, Pest Elimination, Global High-Tech and Ecolab Digital) collectively grew sales in the double digits. This looked promising for the stock.
A Factor That May Offset ECL’s Gains
Macroeconomic Factors: Ecolab operates in 170 countries, which is why its operations are subjected to unfavorable social, political and economic challenges that may be ongoing in various countries. Per the second-quarter earnings call, management acknowledged several macroeconomic challenges that are creating near-term headwinds. Tariffs and tariff-related inflation remain a pressure point, with commodity costs running in the low to mid-single-digit range and expected to persist through the back half of the year.
The company also pointed to softer demand in paper and basic industries, which weighed on its performance compared with more resilient sectors. In addition, foreign exchange movements are expected to have an unfavorable impact on expenses relative to last year.
Estimate Trend
Ecolab is witnessing a negative estimate revision trend for 2026. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved south by 3 cents to $8.43 per share.
The Zacks Consensus Estimate for the company’s fourth-quarter 2025 revenues is pegged at $4.19 billion, indicating a 4.7% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are IDEXX Laboratories (IDXX - Free Report) , Boston Scientific (BSX - Free Report) and STERIS (STE - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for IDEXX’s 2025 earnings per share (EPS) have remained constant at $12.93 in the past 30 days. Shares of the company have risen 12.6% in the past year compared with the industry’s 11.1% growth. IDXX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.1%. In the last reported quarter, it delivered an earnings surprise of 8.3%.
Boston Scientific shares have gained 2.9% in the past year. Estimates for the company’s 2025 EPS have remained constant at $3.04 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.4%. In the last reported quarter, it posted an earnings surprise of 5.6%.
STERIS shares have risen 9.1% in the past year. Estimates for the company’s 2025 EPS have increased by 2 cents to $10.23 in the past 30 days. STE’s earnings topped estimates in three of the trailing four quarters and matched on one occasion, delivering an average surprise of 2.6%. In the last reported quarter, it posted an earnings surprise of 2.6%.