Erste Group Sees Limited Upside for Ecolab (ECL) at Current Valuation

Ecolab Inc. (NYSE:ECL) is included among the Dividend Growth Stocks: 25 Aristocrats.

On January 23, Erste Group lowered its rating on Ecolab Inc. (NYSE:ECL) to Hold from Buy. The decision came down to valuation. The firm said Ecolab’s price-to-earnings multiple now sits well above sector averages, a point the analyst highlighted in a research note.

Earlier in December, Ecolab completed its previously announced acquisition of Ovivo’s electronics business. Ovivo is a fast-growing provider of ultrapure water technologies used in semiconductor manufacturing, an area seeing strong demand.

The deal expands Ecolab’s reach across the artificial intelligence value chain, stretching from chip fabrication to data centers. It more than doubles the size of the company’s global high-tech growth platform and positions Ecolab as a leading supplier to these fast-moving industries. By combining Ovivo’s ultrapure water expertise with Ecolab’s global water, digital, and service capabilities, the company aims to deliver circular water management solutions tailored to the water-intensive semiconductor industry and help customers reduce overall water use.

Ecolab Inc. (NYSE:ECL) provides water, hygiene, and infection prevention solutions that support public health and protect critical resources. Within its Global Industrial segment, the company offers water treatment, process applications, and cleaning and sanitizing solutions, primarily serving large industrial customers.

While we acknowledge the potential of ECL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.