ECL Fair Value Estimate
$129.6850.0% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
Ecolab Inc
Exchange: NYSESector: Basic MaterialsIndustry: Specialty Chemicals
A trusted partner for millions of customers, Ecolab is a global sustainability leader offering water, hygiene and infection prevention solutions and services that protect people and the resources vital to life. Building on more than a century of innovation, Ecolab has annual sales of $16 billion, employs approximately 48,000 associates and operates in more than 170 countries around the world. The company delivers comprehensive science-based solutions, data-driven insights and world-class service to advance food safety, maintain clean and safe environments, and optimize water and energy use. Ecolab's innovative solutions improve operational efficiencies and sustainability for customers in the food, healthcare, high tech, life sciences, hospitality and industrial markets.
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Pays a 1.03% dividend yield.
Current Price
$259.51
-0.42%GoodMoat Value
$129.68
50.0% overvaluedProfile
Valuation (TTM)
Market Cap$73.50B
P/E35.41
EV$82.15B
P/B7.52
Shares Out283.24M
P/Sales4.57
Revenue$16.08B
EV/EBITDA21.80
Ecolab Inc (ECL) Valuation
GoodMoat Analysis
Ecolab's current valuation appears unfavourable for a value investor. The stock trades at a significant premium to its GoodMoat Target, offering a negative margin of safety, and its P/E multiple is elevated compared to its sector and its own profitability.
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Based on the GoodMoat Investment Framework, Ecolab's valuation assessment yields a clear conclusion. The current price of $268.54 is 107% above the GoodMoat Target of $129.68. According to the framework's DCF-based Margin of Safety bands, this represents a negative margin of safety, placing it firmly in the 'Unfavourable' category (<10%). The stock's forward P/E of 36.6x is high, especially when contextualized against its profit margin of 12.9% and a free cash flow yield of just 2.6%. For a value investor, this suggests the market is pricing in near-perfect future execution with little room for error. While the company shows strong operational metrics like an ROE of 21.2%, the valuation multiples do not provide the necessary cushion or 'margin of safety' that is a cornerstone of value investing. The price implies high growth expectations that may already be fully reflected, making the risk/reward profile unattractive from a traditional value perspective. Analysis based on data as of 2024-05-15.
ECL Valuation Metrics
FCF$1.96B
FCF Growth Rate2.40%
EPS Growth (CAGR)4.89%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →ECL Valuation & Fair Value Analysis
Ecolab Inc (ECL) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for Ecolab Inc is $129.68. The current stock price is $259.51, suggesting the stock is 100.1% overvalued.
The price-to-earnings (P/E) ratio is 35.41. Price-to-book ratio is 7.52. Price-to-sales ratio is 4.57. Enterprise value to EBITDA is 21.80. PEG ratio is 1.79.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of Ecolab Inc's intrinsic value.