How Is Ecolab's Stock Performance Compared to Other Material Stocks?
With a market cap of $69.5 billion, Saint Paul, Minnesota-based Ecolab Inc. (ECL) is a global leader in water, hygiene, and infection prevention solutions and services. Ecolab's offerings include water treatment, cleaning, sanitizing, and pest elimination solutions, along with advanced contamination control and operational efficiency programs.
Companies valued at $10 billion or more are generally considered “large-cap” stocks and Ecolab fits this criterion perfectly. Its innovative products and services are delivered through a network of field sales teams, corporate account personnel, distributors, and dealers worldwide.
However, the water solutions company pulled back 6.5% from its 52-week high of $262.61, achieved on Oct. 18. Shares of Ecolab have declined 1.6% over the past three months, underperforming the broader iShares U.S. Basic Materials ETF’s (IYM) marginal dip over the same time frame.
However, longer term, ECL stock is up 24.4% on a YTD basis, outperforming IYM’s 1.8% gain. Moreover, shares of Ecolab have surged 27.1% over the past 52 weeks, compared to IYM’s 6.5% return over the same time frame.
ECL stock has been trading above its 50-day and 200-day moving averages since last year. However, since November, the stock has dipped below its 50-day moving average.
Despite reporting better-than-expected Q3 adjusted EPS of $1.83, shares of Ecolab fell over 1% on Oct. 29 due to revenue concerns. The company reported around $4 billion in quarterly revenues, which missed the consensus estimate, signaling weaker-than-expected top-line performance. Concerns were further fueled by an 18.2% decline in reported sales for the Healthcare & Life Sciences segment, largely due to the divestiture of the global surgical solutions business.
In comparison, its rival, The Sherwin-Williams Company (SHW) is underperforming ECL. Shares of Sherwin-Williams have gained 24.9% over the past 52 weeks and 18.1% on a YTD basis.
Despite ECL’s strong price action over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 25 analysts covering the stock, and the mean price target of $280.11 suggests a premium of 13.8% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.