DCF Studio

    ECL · NYQ · Basic Materials

    Ecolab Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 124.35

    Market price

    USD 308.38

    Implied upside

    -59.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 24.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 124.35-59.7%
    Exit multiple
    USD 230.82-25.2%
    Market price
    USD 308.38

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 17.9bnUSD 19.3bnUSD 20.8bnUSD 22.1bnUSD 23.5bnUSD 24.7bnUSD 25.8bnUSD 26.8bnUSD 27.7bnUSD 28.4bn+5.2%
    EBITUSD 2.7bnUSD 2.9bnUSD 3.1bnUSD 3.3bnUSD 3.5bnUSD 3.7bnUSD 3.9bnUSD 4.0bnUSD 4.2bnUSD 4.3bn+5.2%
    NOPATUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.7bnUSD 2.9bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bn+5.2%
    Add depreciation & amortisationUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.7bn+5.2%
    Less capital expenditureUSD -1.0bnUSD -1.1bnUSD -1.3bnUSD -1.4bnUSD -1.5bnUSD -1.6bnUSD -1.7bnUSD -1.8bnUSD -1.9bnUSD -2.0bn+7.8%
    Capex, % of revenue5.7%5.9%6.0%6.2%6.3%6.5%6.6%6.8%6.9%7.1%-
    Less increase in working capitalUSD -317.1mUSD -248.4mUSD -245.3mUSD -238.5mUSD -227.9mUSD -213.4mUSD -195.2mUSD -173.3mUSD -148.1mUSD -119.8m-10.3%
    Free cashflow to firmUSD 2.0bnUSD 2.2bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.1bn+5.2%
    Discount factor0.96090.88720.81910.75630.69830.64470.59530.54960.50740.4685-
    Present valueUSD 1.9bnUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.8bnUSD 1.8bnUSD 1.7bnUSD 1.6bnUSD 1.6bnUSD 1.5bn-
    Present Value Of The ForecastUSD 17.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.904Reported 0.857, pulled toward 1.0 (Blume)
    Cost of equity8.72%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.4x interest cover. Book interest / average debt was lower, at 3.5%.
    Market capitalisationUSD 86.5bn90.6% of capital
    Total debtUSD 9.0bn9.4% of capital, book value as a proxy
    Tax rate17.6%Effective, capped at statutory
    WACC8.31%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 124.35

    60% of EV

    Forecast FCFF, final year
    USD 3.1bn
    Capex at depreciation, working capital in reinvestment
    USD 4.0bn
    Less reinvestment at g/ROIC (21.0% of NOPAT)
    USD -836.6m
    Capitalised
    USD 3.2bn
    ROIC (reported)
    11.9%
    Terminal value, undiscounted
    USD 55.7bn
    Terminal value, discounted
    USD 26.1bn
    Enterprise value
    USD 43.8bn
    Less net debt
    USD 8.4bn
    Equity value
    USD 35.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 230.82

    76% of EV

    Terminal value, undiscounted
    USD 120.5bn
    Terminal value, discounted
    USD 56.5bn
    Enterprise value
    USD 74.2bn
    Less net debt
    USD 8.4bn
    Equity value
    USD 65.8bn

    Spread between methods: 60%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.31%186.71194.76205.29219.43239.12
    7.31%148.41151.89156.38162.23169.96
    8.31%121.44122.68124.35126.57129.53
    9.31%101.44101.50101.75102.22102.99
    10.31%86.0385.4684.9584.5484.23

    Outlined: this model. Green text: above today's price of 308.38. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.3%5.8%16.0%
    EBIT margin18.0%15.1%34.5%
    Discount rate-8.3%5.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.