Ecolab Inc. (ECL) Stock Valuation — DCF Analysis
Chemicals - Specialty · NYSE
Current Price
$265.41
Intrinsic Value
$280.3
+5.3% margin of safety
COMPETITIVE MOAT
↑Sticky Customer Relationships
Ecolab's integrated solutions and on-site service create deep customer dependencies. Switching costs are high due to specialized equipment and training.
↑Brand Reputation & Trust
The Ecolab brand is synonymous with hygiene and safety in critical industries. This trust is built over decades and difficult for competitors to replicate.
↑Proprietary Technology & Data
Investments in digital platforms and data analytics provide unique insights for customers. This enhances efficiency and compliance, creating a technological advantage.
INVESTMENT RISKS
↓Intensifying Competition
While moats exist, the specialty chemicals sector sees new entrants and aggressive pricing from established players. This can pressure margins.
↓Raw Material Cost Volatility
Fluctuations in the cost of key raw materials can impact profitability. Ecolab's ability to pass these costs on is not always guaranteed.
↓Regulatory & Environmental Changes
Evolving environmental regulations and product compliance requirements can necessitate costly adjustments. Non-compliance carries significant penalties.
Base case
ECL base case valuation
A base case discounted cash flow model for ECL estimates an intrinsic value of about $280.3 per share, against a current price of $265.41. The model assumes 14.4% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$280.3
Margin of safety
+5.3%
Expected annual return
+1.1%
Base case assumptions: 14.4% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ECL valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Ecolab Inc. respond.
Open DCF Calculator for ECLCompany Overview
Ecolab Inc. delivers essential water, hygiene, and infection prevention products and services to clients across the United States and globally. The company organizes its operations into several key segments: Global Industrial, Global Institutional & Specialty, Global Healthcare & Life Sciences, and an "Other" segment. Through its Global Industrial division, Ecolab furnishes a range of water treatment, process applications, and cleaning and sanitizing solutions. These offerings cater to a diverse array of sectors including manufacturing, food and beverage processing, transportation, chemical production, metals and mining, power generation, pulp and paper, commercial laundries, and the petroleum, refining, and petrochemical industries. The Global Institutional & Specialty segment focuses on delivering specialized cleaning and sanitizing products primarily to the foodservice, hospitality, lodging, government and education, and retail sectors. Ecolab's Global Healthcare & Life Sciences segment addresses the needs of the healthcare, personal care, and pharmaceutical industries. It supplies specialized cleaning and sanitizing products, encompassing infection prevention, surgical solutions, and comprehensive cleaning and contamination control, marketed under brand names like Ecolab, Microtek, and Anios. Within the "Other" segment, Ecolab provides pest elimination services. These services aim to detect, eliminate, and prevent pests, including rodents and insects, for various clients such as restaurants, food and beverage processors, educational and healthcare institutions, hotels, quick service restaurants, grocery stores, and other commercial and institutional entities. This segment additionally furnishes colloidal silica, used for binding and polishing applications in the semiconductor, catalyst, aerospace component manufacturing, and chemical sectors. Furthermore, it delivers products and services for comprehensive wash process management, featuring custom-designed programs, premium products, dispensing equipment, water and energy conservation, and real-time data management. Ecolab distributes its offerings via its field sales and corporate account teams, as well as through a network of distributors and dealers. Established in 1923, the company maintains its headquarters in Saint Paul, Minnesota.
Financial Metrics — ECL Stock Valuation Data
Revenue/Share (TTM)
$58.34
FCF/Share (TTM)
$6.63
ROIC (TTM)
11.5%
ROE (TTM)
21.7%
P/FCF
39.9x
EV/EBITDA
25.4x
FCF Yield
2.50%
Debt/Equity
0.91x
Based on trailing twelve-month data, ECL shows a free cash flow per share of $6.63 and a ROIC of 11.5%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 39.9x and FCF yield of 2.50% are important context metrics when evaluating ECL's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ECL?
Ecolab Inc. currently generates $6.63 in free cash flow per share. At the current price of $265.41, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ECL undervalued?
ECL trades at a P/FCF ratio of 39.9x with a free cash flow yield of 2.50%. This P/FCF is in a moderate range. However, whether ECL is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ECL stock using DCF?
To perform a DCF valuation on Ecolab Inc.: (1) Start with the trailing free cash flow per share ($6.63) as the base, (2) project future FCF growth over 5-10 years based on Chemicals - Specialty industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ECL's risk profile — with a debt-to-equity of 0.91x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ECL?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Ecolab Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Chemicals - Specialty trends, then discounting those amounts to today's dollars. ECL's ROIC of 11.5% shows moderate capital returns.
How does WACC affect ECL stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ECL, with a debt-to-equity ratio of 0.91x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 25.4x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ECL PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value ECL with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.