Ecolab (ECL +0.2%) wavers between slight gains and losses as analysts diverge in their views on the company, with Nomura upgrading shares to Buy from Neutral but UBS downgrading the stock to Neutral from Buy.
In his upgrade, Nomura analyst Dan Dolev says that with the problematic energy business soon to be spun off, ECL's "recession resistant qualities should stand out, warranting a significant premium to peers."
Following "years of lackluster organic growth," Dolev now expects improved organic revenue growth, better pricing power, a more attractive geographic mix and enhanced efficiency metrics; he raised his ECL price target to $210 from $170.
Meanwhile, UBS analyst John Roberts cites "near-record valuation" in his downgrade, although he raises his price target to $186 from $180.
On ECL's plans to spin off the upstream energy unit, Roberts says the move is unlikely to be accretive given the stock's high valuation but should further stabilize growth since upstream energy was the company's most volatile unit.