On Tuesday, Ecolab Inc. (NYSE:ECL) shares advanced by 3.34% after announcing its most recent quarterly results. The company reported its fiscal third-quarter revenue and earnings before markets opened, beating analyst expectations.
Ecolab posted non-GAAP earnings per share of $1.38, outperforming the consensus for analyst expectations of $1.30. However, its GAAP EPS of $1.12, fell short of the Street forecast of $1.26, while revenue for the quarter grew by nearly 10% from the same quarter a year ago to $3.32 billion, $60 million ahead of estimates.
Although Ecolab shares spiked to retest current 52-week highs of about $231 after Tuesday’s post-earnings rally, the stock is up 6.83% this year, leaving room for more upward movement in the tail-end of the year.
Ecolab’s exciting growth
From an investment perspective, Ecolab shares trade at steep trailing 12-month and forward P/E ratios of 62.69 and 36.73, respectively. Therefore, value investors may opt for alternatives in the market.
However, with analysts expecting earnings to grow by 24.51% next year, before rising at an average annual rate of 16.13% over the next five years, the stock could be a compelling option for long-term investors.
Source – TradingView
Technically, Ecolab shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has rallied closer to the overbought conditions of the 14-day RSI, pushing the stock price towards the trendline resistance.
Therefore, investors could target potential pullback profits at about $223.98, or lower at $218.57, while $233.78 and $238.75 are crucial resistance zones.
It could be time to take some profits
In summary, with Ecolab shares trading closer to the current 52-week highs, the current valuation multiples may persuade investors to take profits.
In addition, the stock has recently rallied closer to the overbought conditions of the 14-day RSI. Therefore, although the ECL stock offers exciting growth prospects, it may be best to wait for the price to retest current support levels before buying.
The post Is it safe to buy Ecolab shares after surpassing Q3 expectations? appeared first on Invezz.
