Ecolab (ECL) could see stronger earnings growth as pricing, higher volumes, cost savings, AI and digital tools, and better margins support results over the next several years, UBS said in a note Tuesday.

The investment firm said Ecolab's shift toward faster-growing high-tech markets could lift annual volume growth to about 4%, above its older pace of about 1% to 2%.

UBS expects adjusted earnings per share to grow at about a 17% annual rate from 2027 to 2029, helped by stronger sales and higher margins, while high-tech sales, including semiconductor water treatment and data center cooling, could grow to 12% to 14% of total sales and support better margins.

Ecolab's broader growth areas, including life sciences, pest control, digital services, and high tech, could rise to about 25% of sales, though UBS said it expects margin growth to slow in 2026 because of raw material costs, but said margins could improve again from 2027 and reach about 24% by 2029.

UBS upgraded Ecolab to buy from neutral and raised its price target to $325 from $293.

Shares of the company were up about 4.6% in Wednesday trading.

Price: 265.63, Change: +11.40, Percent Change: +4.48