Here's Why You Should Retain Ecolab Stock in Your Portfolio Now

Ecolab Inc. ECL has been gaining from its solid product portfolio. The optimism, led by a solid first-quarter 2025 performance and continued focus on research and development, is expected to contribute further. However, concerns regarding stiff competition persist.This Zacks Rank #3 (Hold) stock has gained 11.1% in the year-to-date period compared with the industry’s 1% growth. The S&P 500 Composite has increased 1.2% during the same time frame.The renowned water, hygiene and infection prevention solutions and services provider has a market capitalization of $73.8 billion. It projects 13.6% growth for the next five years and expects to maintain a strong performance in the future. Ecolab’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 0.72%.Image Source: Zacks Investment ResearchReasons Favoring Ecolab’s GrowthStrong Product Portfolio With a Focus on R&D: Ecolab’s diverse portfolio spanning water treatment, hygiene, life sciences, digital technologies, and pest control gives it a strong competitive edge, reinforced by consistent R&D investments. The global water treatment market, valued at $38.56 billion in 2023, is forecasted to register a CAGR of 8.1% through 2030, offering significant expansion potential.Ecolab’s advanced solutions, including the 3D TRASAR AI Dishmachine Program and the Ecolab 3D Cloud platform, leverage IoT and AI to boost operational efficiency. Its acquisition of Purolite has enhanced its ultra-purification capabilities, addressing rising demand in biopharma and gene therapy. With a focus on innovation and capex-driven growth, Ecolab is well-positioned as a tech-driven leader in high-growth markets.Ecolab’s Global High-Tech Business & Digital Platform: Ecolab is accelerating its transformation through two key high-growth, high-margin drivers — its Global High-Tech business and the Ecolab Digital Platform. The Global High-Tech segment, which caters to data centers and the microelectronics industry, has exceeded $300 million in annual sales with operating margins of more than 20%, fueled by increasing demand for liquid cooling systems amid the expansion of AI-driven infrastructure.Complementing this, the Ecolab Digital Platform integrates IoT, AI, and cloud analytics across more than 100,000 customer systems, capturing over 120 billion data points in 2024. This platform boosts recurring revenue by optimizing water, energy, and hygiene performance, while also enhancing service productivity and margins through remote monitoring and predictive maintenance capabilities.Strong Q1 Results: Ecolab exited the first quarter of 2025 with mixed results. Earnings remained in line with the consensus estimate, and revenues missed the same. However, the company registered a robust year-over-year uptick in its organic sales and bottom line, along with solid performances across most of its segments. The expansion of operating margin bodes well for the stock.Per management, growth in the United States (ECL’s largest and most profitable region) continued to be strong, and growth across the rest of the world was also solid, as the company was able to offset uneven macroeconomic trends. This looked promising for the stock.A Factor That May Offset ECL’s GainsStiff Competition: Ecolab operates in intensely competitive markets across water treatment, hygiene and pest elimination where pricing pressure and market share battles threaten its growth. While value-based pricing has supported recent revenue gains, sustaining this amid growing competition from large multinationals like Procter & Gamble, Danaher and Schlumberger and lower-cost regional players poses a challenge.In water treatment, Ecolab faces rivals including Pentair, Aqua America and Danaher, in hygiene and food safety, competitors include Clorox, Sealed Air and Thermo Fisher, and in healthcare, firms like 3M and Steris are key challengers. Price sensitivity in Institutional and Pest Elimination segments further limits pricing power and increases customer retention risk.Estimate TrendEcolab is witnessing a negative estimate revision trend for 2025. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4 cents south to $7.50 per share.The Zacks Consensus Estimate for the company’s second-quarter 2025 revenues is pegged at $4.01 billion, indicating a 0.6% improvement from the year-ago quarter’s reported number.Key PicksSome better-ranked stocks in the broader medical space that have announced quarterly results are CVS Health Corporation CVS, Integer Holdings Corporation ITGR and AngioDynamics ANGO.CVS Health, carrying a Zacks Rank of 2 (Buy), reported first-quarter 2025 adjusted earnings per share (EPS) of $2.25, beating the Zacks Consensus Estimate by 31.6%. Revenues of $94.59 billion outpaced the consensus mark by 1.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.CVS Health has a long-term estimated growth rate of 11.4%. CVS’s earnings surpassed estimates in each of the trailing four quarters, with an average surprise of 18.1%.Integer Holdings reported first-quarter 2025 adjusted EPS of $1.31, beating the Zacks Consensus Estimate by 3.2%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%. It currently sports a Zacks Rank #1.Integer Holdings has a long-term estimated growth rate of 18.4%. ITGR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.AngioDynamics, currently sporting a Zacks Rank #1, reported a third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a 13-cent loss. Revenues of $72 million beat the Zacks Consensus Estimate by 2%.ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 Composite’s 10.5% growth. The company surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 70.9%.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ecolab Inc. (ECL): Free Stock Analysis Report AngioDynamics, Inc. (ANGO): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report Integer Holdings Corporation (ITGR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks