Shareholders might have noticed that Ecolab Inc. (NYSE:ECL) filed its quarterly result this time last week. The early response was not positive, with shares down 3.3% to US$237 in the past week. The result was positive overall - although revenues of US$4.0b were in line with what the analysts predicted, Ecolab surprised by delivering a statutory profit of US$1.71 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, Ecolab's 22 analysts currently expect revenues in 2024 to be US$15.8b, approximately in line with the last 12 months. Statutory earnings per share are predicted to step up 13% to US$6.78. In the lead-up to this report, the analysts had been modelling revenues of US$16.0b and earnings per share (EPS) of US$6.60 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$251, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ecolab analyst has a price target of US$291 per share, while the most pessimistic values it at US$200. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ecolab shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Ecolab's revenue growth is expected to slow, with the forecast 2.5% annualised growth rate until the end of 2024 being well below the historical 5.0% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Ecolab is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Ecolab's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$251, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Ecolab. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ecolab going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Ecolab .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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