Potential investors in water, hygiene, and infection prevention company Ecolab (NYSE: ECL) are faced with a series of questions around the stock's valuation right now. On the one hand the stock is better positioned for growth now, and the pandemic will raise awareness of hygiene issues. On the other hand, many of its end market customers are continuing to suffer. Let's take a closer look at whether Ecolab is a good value or not right now.
The bull/bear debate over the Ecolab stock revolves around what its valuation should be in light of business developments in 2020. Frankly, there's a lot going on.
First, it's hard to argue that Ecolab is cheap in relation to its historical metrics. As the chart below demonstrates, the stock is trading toward the high end of its historical valuation ranges. While the COVID-19 pandemic has obviously reduced earnings expectations for 2020, it's worth noting that Ecolab still trades on 38 times 2021 earnings estimates.
Source Fool.com