Friday 21st of January 2022 07:58:28 AM

Ecolab sinks as supply chain challenges hit guidance, prompt downgrade

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• Ecolab (ECL -5.9%) plunges to a 52-week low after cutting Q4 earnings guidance, citing supply chain disruptions, and RBC Capital analysts downgrade shares.
• Ecolab pre-announced below-consensus Q4 EPS of $1.26-$1.28, and said it expects FY 2022 EPS growth in the low teens, compared with consensus expectations of low-20% growth.
• RBC's Ashish Sabadra cuts shares to Sector Perform from Outperform with a $225 price target, trimmed from $245, saying a solid market position, technology leadership, recovery post-Omicron, and pricing increases should help lift growth, but not enough to offset near-term raw materials headwinds, particularly given rising oil prices and inflationary pressure.
• Sabadra notes the company also previously lowered its FY 2021 earnings growth because of the Texas freeze and Hurricane Ida.
• Ecolab announced this morning that it will implement a 12% price increase for all Life Sciences division offerings.

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