We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Ecolab (ECL) Stock For Now
Read MoreHide Full Article
Ecolab Inc. (ECL - Free Report) continues to benefit from robust product portfolio, strong international presence and continued solid performance at the Global Industrial segment. However, forex remains a concern.
The stock carries a Zacks Rank #3 (Hold).
Price Performance
Shares of Ecolab have gained 32.2% year to date, outperforming the industry’s growth of 16.8%. Meanwhile, the S&P 500 Index rallied 17.3% in the same timeframe.
What’s Deterring the Stock?
Given Ecolab’s strong international presence and volatility in foreign currency exchange rates continue to plague the stock’s overall performance. We believe that volatile foreign currency exchange rates will remain a significant headwind in 2019 and beyond.
In fact, management at Ecolab expects foreign currency translation to have an unfavorable impact of 11 cents on 2019 EPS. Additionally, third-quarter EPS is likely to be impacted by 2 cents.
What’s Favoring the Stock?
Ecolab continues to gain from robust product portfolio, thereby boosting overall results. The company has major launches underway including the new Smartpowerware wash platform, which is expected to drive institutional improvements. Moreover, the company continues to invest significantly in customer-oriented and infrastructure technology.
Further, Ecolab has been gaining traction in digital technology markets. Per management, new additions in the company’s portfolio will help it to reach its mid-teens EPS growth goal in 2019 and beyond.
The company has significant presence in the international market, with international operations in Europe, Asia-Pacific, Latin America and Canada. We anticipate this momentum to continue in the future on the back of solid performance from emerging markets.
Global Industrial segment continues to drive its growth. In fact, in the second quarter of 2019, sales at this segment improved 4% year over year to almost $1.38 billion in the second quarter. The upside was driven by major gains in Water and Life Sciences units. Geographically, all regions showed impressive sales growth in the last reported quarter.
Which Way are Estimates Headed?
For 2019, the Zacks Consensus Estimate for revenues is pegged at $15.21 billion, indicating an improvement of 3.7% from the year-ago quarter. The same for earnings per share stands at $5.91, suggesting growth of 12.6% from the year-ago reported figure.
Nissan Chemical has a long-term earnings growth rate of 10%.
Fresenius Medical has a long-term earnings growth rate of 5.9%.
McKesson has a long-term earnings growth rate of 6.9%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
Image: Bigstock
Here's Why You Should Retain Ecolab (ECL) Stock For Now
Ecolab Inc. (ECL - Free Report) continues to benefit from robust product portfolio, strong international presence and continued solid performance at the Global Industrial segment. However, forex remains a concern.
The stock carries a Zacks Rank #3 (Hold).
Price Performance
Shares of Ecolab have gained 32.2% year to date, outperforming the industry’s growth of 16.8%. Meanwhile, the S&P 500 Index rallied 17.3% in the same timeframe.
What’s Deterring the Stock?
Given Ecolab’s strong international presence and volatility in foreign currency exchange rates continue to plague the stock’s overall performance. We believe that volatile foreign currency exchange rates will remain a significant headwind in 2019 and beyond.
In fact, management at Ecolab expects foreign currency translation to have an unfavorable impact of 11 cents on 2019 EPS. Additionally, third-quarter EPS is likely to be impacted by 2 cents.
What’s Favoring the Stock?
Ecolab continues to gain from robust product portfolio, thereby boosting overall results. The company has major launches underway including the new Smartpowerware wash platform, which is expected to drive institutional improvements. Moreover, the company continues to invest significantly in customer-oriented and infrastructure technology.
Further, Ecolab has been gaining traction in digital technology markets. Per management, new additions in the company’s portfolio will help it to reach its mid-teens EPS growth goal in 2019 and beyond.
The company has significant presence in the international market, with international operations in Europe, Asia-Pacific, Latin America and Canada. We anticipate this momentum to continue in the future on the back of solid performance from emerging markets.
Global Industrial segment continues to drive its growth. In fact, in the second quarter of 2019, sales at this segment improved 4% year over year to almost $1.38 billion in the second quarter. The upside was driven by major gains in Water and Life Sciences units. Geographically, all regions showed impressive sales growth in the last reported quarter.
Which Way are Estimates Headed?
For 2019, the Zacks Consensus Estimate for revenues is pegged at $15.21 billion, indicating an improvement of 3.7% from the year-ago quarter. The same for earnings per share stands at $5.91, suggesting growth of 12.6% from the year-ago reported figure.
Key Picks
Some better-ranked stocks from the broader medical space are Nissan Chemical Corporation (NNCHY - Free Report) , Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) and McKesson Corporation (MCK - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nissan Chemical has a long-term earnings growth rate of 10%.
Fresenius Medical has a long-term earnings growth rate of 5.9%.
McKesson has a long-term earnings growth rate of 6.9%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>