ECL
Ecolab Inc.
$287.96
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 163.7% above fair value
You pay
$287.96
Bear
$87.36
Fair
$109.20
Bull
$131.04
Bear
$87.36
-69.7%
$7.28 × 12x P/E
Fair
$109.20
-62.1%
$7.28 × 15x P/E
Bull
$131.04
-54.5%
$7.28 × 18x P/E
Adjust Assumptions
15.0x
7.28$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
39.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$326.38
Divergence from AlphaVal
67%
Summary
Applying a 15x P/E to adjusted EPS of $7.28, the base-case value is $109.20 per share. DDM cross-check: $556.40.
Warnings
Dividend-based valuation: $556.40 (above our primary estimate by 410%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $326.38 (from 37 analysts). Our estimate is 67% 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