ECL
Ecolab Inc.
$282.90
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.2% above fair value
You pay
$282.90
Bear
$148.72
Fair
$185.90
Bull
$223.08
Bear
$148.72
-47.4%
$8.36 × 12x P/E
Fair
$185.90
-34.3%
$8.36 × 15x P/E
Bull
$223.08
-21.1%
$8.36 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
33.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $327.17 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $185.90 per share.
Warnings
Dividend-based valuation: $361.42 (above our primary estimate by 188%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $327.17 (from 37 analysts). Our estimate is 62% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples