uploads///ecl pm

Sterne Agee CRT Rated Ecolab as a ‘Buy’

By

Dec. 4 2020, Updated 10:52 a.m. ET

Price movement of Ecolab

Ecolab (ECL) has a market cap of $32.7 billion. ECL rose by 1.5% to close at $110.56 per share on March 22, 2016. The price movements on a weekly, monthly, and year-to-date (or YTD) basis were 6.3%, 2.6%, and -3.0%, respectively.

Currently, ECL is trading 5.5% above its 20-day moving average, 5.3% above its 50-day moving average, and 0.95% below its 200-day moving average.

The PowerShares Water Resource Portfolio ETF (PHO) invests 7.6% of its holdings in Ecolab. The ETF tracks a modified liquidity-weighted index of US-listed companies that create products to conserve and purify water. The YTD price movement of PHO was 0.37%.

The market caps of Ecolab’s competitors are as follows:

  • Danaher Corporation (DHR) – $65.2 billion
  • Rollins (ROL) – $5.9 billion
  • ServiceMaster Global Holdings (SERV) – $4.9 billion
Article continues below advertisement

Sterne Agee initiated coverage of Ecolab

Sterne Agee CRT has initiated the coverage of Ecolab with a “buy” rating and set the price target at $136.00 per share.

Performance in fiscal 4Q15 and 2015

Ecolab (ECL) reported fiscal 4Q15 net sales of $3,412.0 million—a fall of 7.3% compared to net sales of $3,680.8 million in fiscal 4Q14. The sales of the Global Industrial and Global Institutional segments rose by 4.1% and 5.4%, respectively, in fiscal 4Q15. The sales of the Global Energy segment fell by 13.6% in fiscal 4Q15 compared to fiscal 4Q14.

Its net income and EPS (earnings per share) fell to $208.9 million and $0.69, respectively, in fiscal 4Q15 compared to $335.5 million and $1.10, respectively, in fiscal 4Q14.

Article continues below advertisement

Fiscal 2015 results

In fiscal 2015, Ecolab reported net sales of $13,545.1 million—a fall of 5.1% year-over-year. Its net income and EPS fell to $1,002.1 million and $3.32, respectively, in fiscal 2015, compared to $1,202.8 million and $3.93, respectively, in fiscal 2014.

Meanwhile, its cash and cash equivalents and inventories fell by 55.7% and 5.4%, respectively, in fiscal 2015. Its current ratio fell to 0.93x and its DE (debt-to-equity) ratio rose to 1.7x in fiscal 2015—compared to a current ratio and DE ratio of 1.1x and 1.6x, respectively, in fiscal 2014.

Ecolab’s price-to-earnings and price-to-book value ratios were 33.2x and 4.7x, respectively, as of March 22, 2016.

Projections

Ecolab (ECL) made the following projections for fiscal 2016 and fiscal 1Q16:

Fiscal 2016

  • It expects mid-single-digit fixed currency sales growth in institutional, industrial, and other segments.
  • The adjusted gross margin, excluding special gains and charges, is expected to be 47%–48%.
  • It expects an adjusted tax rate of ~26%.
  • The non-controlling interest should be $0.06–$0.10.
  • The adjusted EPS, excluding special gains and charges, is expected to be $4.35–$4.55.

Fiscal 1Q16

  • The adjusted gross margin, excluding special gains and charges, is expected to be ~47%.
  • The company anticipates an adjusted tax rate of ~26%.
  • The non-controlling interest is expected to be $0.01–$0.02.
  • The adjusted EPS, excluding special gains and charges, is expected to be $0.73–$0.80.

Now, let’s take a look at NIKE.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.