$54.15
$123.21
bear $54.15
base $95.22
bull $123.21
margin of safety $62.00
market price* $288.89
Ecolab sells water treatment, cleaning, sanitizing and infection-prevention chemicals, equipment and on-site service to hotels, restaurants, hospitals, food and beverage plants, factories and other industrial sites in more than 170 countries, with about 47% of 2025 sales outside the United States. Much of the revenue comes from route-based service on recurring products, which is why results held up through the 2020 shutdowns and the 2022 raw-material squeeze. What changed since our last look. Our earlier estimate ($35 bear, $70 base, $94 bull) discounted at 10% and did not reflect two things that now matter. First, Ecolab issued $5.0 billion of senior notes in May 2026 (4.60% to 5.35%, maturing 2029 to 2036) and used cash on July 2, 2026 to buy CoolIT Systems, a data-center liquid-cooling maker, for about $4.75 billion. Second, we now value the business before its lenders and then subtract the debt, at a flat 6% discount rate. Moving from a 10% to a 6% discount rate raises every case, while the additional debt lowers each one; both effects are in the numbers below. How we measured earnings. Owner earnings are operating cash flow less swings in working capital (receivables, inventories, payables and other operating assets and liabilities), less stock compensation, less only the maintenance part of capital spending (growth capex is estimated at about 5.5% of each year's sales increase). Per share, they were roughly $4.66 (2018), $4.68, $4.75, $4.78, $4.69, $5.03, $5.34 and $6.99 (2025); 2016 and 2017 include the former energy business and are not comparable. To value the business ahead of its lenders we add back cash interest paid, which gives $5.50, $5.47, $6.17, $6.54 and $8.05 per share for 2021 through 2025. We anchor on the median of 2021-2025, $6.17 per share (about $1.74 billion on today's 282.2 million shares). That window starts after the 2020 spin-off of ChampionX and includes the 2022 cost squeeze; 2025 looks high partly because working capital absorbed cash that year, so we do not use it as the level. First-half 2026 owner earnings were about $965 million versus $889 million a year earlier (+8.6%), so the level still holds even though capital spending rose 29%. As a cross-check, net income plus depreciation and amortization less maintenance capex reconciled to our figure within about 1% in 2024 and 2025 (2024 after removing the $382 million gain on the sale of the surgical business) and within roughly 5% in 2023, where a residual of about $79 million is not explained. Amortization of acquired intangibles (about $304 million a year) is added back as a sunk cost; because acquired intangibles wear out over time, we hold credited growth below the demonstrated rate rather than adjusting the earnings level. Growth. Owner earnings per share grew about 31% in 2025 (from $5.34 to $6.99), helped by working-capital timing; we assume 4% in year one in the base case, below that, so no reversal needs to be argued. Credited growth is the proven, repeatable kind: sales grew about 4% a year from 2018 to 2025 (12.2 billion to 16.1 billion dollars) through the 2020 downturn, and owner earnings per share about 6% a year, funded from Ecolab's own cash. Left out: management's target of a $4 billion high-tech business by 2030, share gains, margin expansion and the restructuring savings program, none of which is contracted or already demonstrated. The three cases (business worth, debt, difference, per share).
Base: existing business grows 4% a year for five years and 3% for five more, then holds flat (the service model persists, but we credit no growth we cannot evidence). CoolIT is credited with $90 million a year of cash earnings, flat, or $1.5 billion in total. Business worth about $141 per share; debt about $46 per share; value about $95.
Bear: the business starts from the weakest year in the window (about $5.47 per share, the 2022 squeeze, $1.54 billion), grows only 1% a year, and CoolIT earns $60 million a year for ten years and then nothing, because Ecolab itself describes its customers as the major hyperscalers and colocation operators, a concentrated group, and it paid about 29 times next-twelve-month adjusted EBITDA. Business worth about $100 per share; debt about $46; value about $54.
Bull: the business starts from the 2023-2025 median ($6.54 per share, $1.85 billion) and grows 6% a year for five years (its demonstrated rate) then 4%; CoolIT earns $110 million a year. Business worth about $169 per share; debt about $46; value about $123. Debt. Total borrowings at June 30, 2026 were about $13.18 billion, of which about $1.27 billion falls due within twelve months. The $5.14 billion of cash on that date was almost entirely used for CoolIT, so we credit none of it. Because the new notes carry coupons below 6% for three to ten years, we reduce the debt by about $229 million; the older debt appears to carry low coupons too (2025 cash interest was $302.6 million on roughly $8 billion of debt), but we did not verify its maturities and give no credit for it. We add the roughly $29 million minority interest. Net debt used is about $12.98 billion, or about $46 per share. Ecolab reports no commercial paper outstanding and an undrawn $2.0 billion credit line, so we see no refinancing squeeze even in the bear case, where cash flow before interest ($1.54 billion) still covers interest that we estimate at roughly $550 million a year. CoolIT is the swing factor. Ecolab says CoolIT should produce about $550 million of sales over the next twelve months, and expects it to add to adjusted earnings per share only in 2028. Our base case credits roughly a third of what was paid because the growth the price implies has not happened yet and is not contracted; if CoolIT delivers that growth, the bull case understates it, and if hyperscaler demand stalls, the bear case may prove too kind. What would make this wrong. Raw-material or pricing pressure deeper than 2022; the stronger 2025 cash generation being the new level rather than the exception (which would make our anchor too low); or CoolIT's cash earnings falling well short of our figures. At 6% and with no credit for unproven growth, these cases suggest Ecolab is a high-quality business whose value depends heavily on how much debt-funded acquisition growth is credited.