ECL: Management Meeting Takeaways: Ecolab Digital Is a Key Growth Driver

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ECL: Management Meeting Takeaways: Ecolab Digital Is a Key Growth Driver

Ecolab Inc. Equity Research

Investment Thesis, Valuation and Risks

Ecolab Inc. (ECL)

Investment Thesis

We rate Ecolab Equal Weight. It is well positioned to benefit from large themes with secular tailwinds, such as water scarcity, climate

change, sustainability, and ensuring a clean/healthy work environment. However, we see risk, particularly within ECL's Industrial segment,

as recent macro uncertainty has weighed on its various end-markets where we see a headwind to volumes, though we remain confident in

ECL's ability to put through >2% price given its value-based pricing strategy.

Target Price Valuation for ECL

• Our $260 price target is based on 31x our '26E EPS and reflects a multiple in line with ECL's historical relative valuation to the market.

• We view a premium valuation to the market as appropriate given ECL's strong track record, limited competition, and long-term secular

growth drivers.

• However, we increasingly see risk skewed to the downside from near-term macro volatility.

Risks to Our Price Target and Rating for ECL

Downside

Sustained raw material price inflation that ECL can't offset w/ price increases

Continued economic slowdown that results in less demand from ECL's customers

Potential for environmental and/or litigation issues given some of ECL's raw materials and resulting products are in highly regulated

categories

Upside

Recovery in paper and basic industries drives a rebound in vol

Growth engines like high-tech and life sciences scale faster than expected, more than offsetting softness in other end mkts

Companies Mentioned in Report

Company Name Ticker Last Price

(05/18/26)

Ecolab Inc. ECL $249.21

Source: Wells Fargo Securities LLC Estimates, FactSet

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