Shareholders might have noticed that Ecolab Inc. (NYSE:ECL) filed its third-quarter result this time last week. The early response was not positive, with shares down 2.4% to US$253 in the past week. Ecolab reported in line with analyst predictions, delivering revenues of US$4.0b and statutory earnings per share of US$4.79, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 22 analysts covering Ecolab are now predicting revenues of US$16.4b in 2025. If met, this would reflect a modest 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.4% to US$7.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.5b and earnings per share (EPS) of US$7.45 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$272, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Ecolab analyst has a price target of US$310 per share, while the most pessimistic values it at US$215. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Ecolab's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2025 being well below the historical 5.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Ecolab is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ecolab's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Ecolab. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ecolab going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Ecolab , and understanding this should be part of your investment process.
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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.
