Ecolab (ECL, Financial) has announced its forecast for adjusted diluted earnings per share for the second quarter of 2025, predicting a range between $1.84 and $1.94. This anticipated growth represents an increase of 10% to 15% compared to the adjusted diluted earnings per share of $1.68 reported in the same period last year.
The company also disclosed it expects specific special charges during this quarter amounting to 7 cents per share, mainly tied to restructuring efforts. While the firm has identified these special charges, it notes that other potential gains or charges remain currently indeterminate.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Ecolab Inc (ECL, Financial) is $277.10 with a high estimate of $310.00 and a low estimate of $232.96. The average target implies an upside of 15.93% from the current price of $239.03. More detailed estimate data can be found on the Ecolab Inc (ECL) Forecast page.
Based on the consensus recommendation from 27 brokerage firms, Ecolab Inc's (ECL, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Ecolab Inc (ECL, Financial) in one year is $208.87, suggesting a downside of 12.62% from the current price of $239.03. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Ecolab Inc (ECL) Summary page.
ECL Key Business Developments
Release Date: February 11, 2025
- Organic Sales Growth: 4% in Q4, driven by consistent volume growth and value pricing.
- U.S. Organic Sales Growth: Mid-single digits, with the U.S. being the most profitable region.
- Global Sales Growth: Low-single digits outside the U.S., driven by resilient demand and value pricing.
- Organic Operating Income Margin (Q4): Increased by 150 basis points.
- Full Year Organic Operating Income Margin: 16.8%, up 290 basis points from the previous year.
- Expected Earnings Growth (2025): 12% to 15%.
- Currency Translation Impact (2025): Expected 3% unfavorable impact on reported sales growth and 4% on adjusted EPS growth.
- High-Tech Business Sales: Averaged over $300 million, with operating income margins above 20%.
- CapEx to Sales (2025): Expected to be around 7%.
- Free Cash Flow: Record levels achieved.
- Dividend Increase: 14% increase in quarterly cash dividend declared in December.
- Share Buybacks (2024): $1 billion of Ecolab stock repurchased.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ecolab Inc (ECL, Financial) achieved record sales, earnings, margins, and free cash flow in 2024, demonstrating strong financial performance.
- The company reported a solid 4% organic sales growth in Q4, driven by consistent volume growth and value pricing, particularly in the United States.
- Ecolab Inc (ECL) increased its organic operating income margin by 150 basis points in Q4, reflecting effective margin management.
- The company is well-positioned to leverage growth opportunities in high-tech sectors like data centers and microelectronics, with strong business pipelines.
- Ecolab Inc (ECL) plans to report digital sales in 2025, highlighting its focus on high-growth, high-margin opportunities in digital and AI capabilities.
Negative Points
- Currency translation is expected to have a 3% unfavorable impact on reported sales growth and a 4% impact on adjusted EPS growth in 2025.
- The pest elimination segment faced earnings headwinds due to accidents, impacting operating income.
- The company anticipates low-single-digit inflation for delivered product costs in 2025, which could pressure margins.
- Ecolab Inc (ECL) expects to increase its capital expenditure to 7% of sales in 2025, which may impact free cash flow.
- The healthcare business, now integrated into the institutional segment, has a lower margin profile, potentially affecting overall segment margins.
