Ecolab Inc. (ECL) Intrinsic Value & DCF Valuation
Chemicals - Specialty · NYSE
Current Price
$283.70
Intrinsic Value
$195.02
-45.5% margin of safety
What Is Ecolab Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Ecolab Inc. (ECL) at $195.02 per share, compared with a market price of $283.7, a margin of safety of -45.5%. The base case assumes 5.9% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $163.37 to $231.05. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Ecolab Inc. (ECL) Undervalued?
At the current price of $283.7, ECL trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Sticky Customer Relationships
Ecolab's essential services and integrated solutions create high switching costs for customers in critical industries like food safety and water treatment. This fosters long-term, recurring revenue streams.
↑Brand Reputation and Trust
The company's long-standing reputation for reliability and expertise in hygiene and water management builds significant trust. This is crucial for clients in highly regulated sectors.
↑Scale and Data Advantage
Ecolab's extensive global presence and data collection from diverse customer sites enable continuous service optimization and innovation. This scale provides a competitive edge in efficiency and insights.
INVESTMENT RISKS
↓Intensifying Cost Pressures
Rising operational costs, as noted in recent reports, could impact Ecolab's profitability if not effectively managed or passed on to customers. This challenges margin expansion.
↓Integration Risks of Acquisitions
The successful integration of significant acquisitions like CoolIT is critical. Any delays or inefficiencies in combining operations and cultures could hinder expected synergies and growth.
↓Regulatory and Environmental Scrutiny
Ecolab operates in highly regulated industries. Changes in environmental standards or new compliance requirements could necessitate significant investment and operational adjustments.
Base case
ECL base case valuation
Intrinsic Value
$195.02
Margin of safety
-45.5%
Expected annual return
-7.2%
Base case assumptions: 5.9% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-07-29.
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)
$59.87
FCF/Share (TTM)
$6.65
ROIC (TTM)
9.4%
ROE (TTM)
21.4%
P/FCF
42.7x
EV/EBITDA
26.5x
FCF Yield
2.34%
Debt/Equity
1.37x
Based on trailing twelve-month data, ECL shows a free cash flow per share of $6.65 and a ROIC of 9.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 42.7x and FCF yield of 2.34% 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 $6.65 in free cash flow per share. At the current price of $283.70, 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 42.7x with a free cash flow yield of 2.34%. A high P/FCF means investors are paying more per dollar of free cash flow, which usually reflects expectations of 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 ($6.65) 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 1.37x, 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 9.4% 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 1.37x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 26.5x, 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 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.