Results: Ecolab Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

The quarterly results for Ecolab Inc. (NYSE:ECL) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$3.8b were in line with what the analysts predicted, Ecolab surprised by delivering a statutory profit of US$1.43 per share, a notable 11% above expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ecolab after the latest results.

View our latest analysis for Ecolab

Taking into account the latest results, the current consensus from Ecolab's 23 analysts is for revenues of US$16.0b in 2024. This would reflect a reasonable 3.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 22% to US$6.59. In the lead-up to this report, the analysts had been modelling revenues of US$16.0b and earnings per share (EPS) of US$6.29 in 2024. So the consensus seems to have become somewhat more optimistic on Ecolab's earnings potential following these results.

The consensus price target was unchanged at US$236, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Ecolab, with the most bullish analyst valuing it at US$269 and the most bearish at US$180 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ecolab's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 4.4% growth on an annualised basis. That is in line with its 3.8% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.4% annually. It's clear that while Ecolab's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ecolab following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$236, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Ecolab analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Ecolab that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.