The firm has a "reduce" rating on shares of the Saint Paul, MN-based provider of water, hygiene and energy technologies and services.
"Ecolab is a quality company, but the recent energy turmoil unveiled management's inability to forecast declines in its energy business (about 25% of revenue) as its outlook dropped from mid-single digit growth last July to high-single digit declines in May," Nomura wrote in an analyst note.
The firm's model forecasts a decline that could reach 13%, which coupled with operating deleverage could drive earnings per share below guidance.
"Moreover, FY17 consensus expectations appear overly optimistic as they assume a healthy acceleration in growth ex. energy (despite a multiyear step down in growth) and robust OM growth (despite fading commodity and synergy tailwinds)," Nomura added.
The firm projects fiscal 2016 earnings per share of $4.30 compared to Wall Street's expectations for earnings per share between $4.35 and $4.55.
Shares of Ecolab are rising 1.01% to $116.41 at the beginning of trading on Wednesday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on the stock.
The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance.
The team believes its strengths outweigh the fact that the company has had generally high debt management risk by most measures that were evaluated.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: ECL