Ecolab (ECL) is considered a "strong franchise" with stable long-term revenue and earnings growth as management focuses on margin expansion through pricing, high-margin verticals, and efficiency improvements, RBC said in a note emailed Monday.

The firm said Ecolab Chief Executive Christophe Beck is confident the company can deliver on the 20% margin target, which is expected to lead to a 12% to 15% annual earnings per share growth while the company's innovations, value-based pricing tailwinds, and the One Ecolab initiative are expected to deliver 4% to 5% revenue growth in the near-term and improve to 5% to 7% over time.

The One Ecolab initiative seeks $55 billion in cross-selling opportunities using sensors for performance benchmarking and aims to streamline customer management with a single account manager, RBC said.

Ecolab balances innovations and renovations, focusing on net-zero solutions, single-use hygiene tablets, and growth areas like Cleantech and data centers, the note said. For Q3, Ecolab expects adjusted EPS in the range of $1.75 to $1.85, reflecting pricing, volume growth, and restructuring impacts.

RBC maintained an outperform rating on Ecolab and raised its price target to $306 from $260.

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