MINNEAPOLIS — Shares of Ecolab rose Tuesday after an analyst upgraded the company and said the stock presents little risk after a recent decline.
John P. McNulty of Credit Suisse raised his rating to "Outperform" from "Neutral," noting that the stock is down 6.9 percent in 2007. He also increased his price target to $50 per share from $49. He expects the company's U.S. business to improve as it takes customers from JohnsonDiversey Inc., a privately-held company that makes industrial cleaning products.
JohnsonDiversey stopped serving health and hospitality customers last March as a way to deal with rising materials costs. McNulty believes Ecolab's profit margins in Europe will also grow, and that as a result, Ecolab will easily reach its profit forecast of $1.63 to $1.66 per share for 2007. He also raised his 2008 earnings estimate to $1.89 per share from $1.86.
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Source: Houston Chronicle