Ecolab Inc. (ECL) Stock Valuation — DCF Analysis
Chemicals - Specialty · NYSE
Current Price
$278.60
Intrinsic Value
$280.3
+0.6% 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 $278.6. 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
+0.6%
Expected annual return
+0.1%
Base case assumptions: 14.4% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-29.
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. provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through four segments: Global Water, Global Institutional & Specialty, Global Pest Elimination, and Global Life Sciences. The Global Water segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, primary metals and mining, power generation, global refining, petrochemical, pulp and paper industries. The Global Institutional & Specialty segment provides cleaning and sanitizing products to the foodservice, healthcare, hospitality, lodging, government, education and retail industries. The Global Pest Elimination segment provides pest elimination services to detect, prevent, and eliminate pests comprising rodents and insects in full-service and quick-service restaurants, food and beverage processors, hotels, grocery operations, and other commercial segments, including education, life sciences, and healthcare. The Global Life Sciences segment provides cleaning and contamination control solutions to pharmaceutical and personal care manufacturers. It offers its products under the Ecolab, Kay, Purolite, and Bioquell brand names. The company sells its products through field sales and corporate account personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in Saint Paul, Minnesota.
Financial Metrics — ECL Stock Valuation Data
Revenue/Share (TTM)
$58.34
FCF/Share (TTM)
$6.63
ROIC (TTM)
11.4%
ROE (TTM)
21.7%
P/FCF
41.9x
EV/EBITDA
24.6x
FCF Yield
2.39%
Debt/Equity
0.93x
Based on trailing twelve-month data, ECL shows a free cash flow per share of $6.63 and a ROIC of 11.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 41.9x and FCF yield of 2.39% 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 $278.60, 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 41.9x with a free cash flow yield of 2.39%. This elevated P/FCF suggests the market is pricing in significant future growth. 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 0.93x, 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 11.4% 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 0.93x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 24.6x, 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 2026-06-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.