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Stockchase Insights3M Co.MMMBUY ON WEAKNESSJan 24, 2024

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

3M's 2024 outlook reflects another year of macroeconomic uncertainty, with lower top-line growth than consensus anticipated. The company's consumer outlook is cautionary, as it expects constrained spending again this year, which may be conservative. 3M's 4Q adjusted EPS of $2.42 was better than expected, supported by a lower tax rate, slightly higher sales growth and benefits from restructuring actions. Organic sales fell 1.4% with a surprise gain in Transportation and Electronics (up 2.7%), but not enough to offset declines in other segments. Adjusted operating margin expanded 180 bps to 20.9%, driven by a 380-bp jump in Transportation and Electronics. A planned first half Health Care spinoff is on track, with cash likely to be used for debt reduction and legal payments. Considering the balance sheet and free cash flow, we would not have serious concerns on the dividend, and consensus still calls for some EPS growth this year ($9.21 to $9.66). But, considering guidance, investors might just sit on the sidelines for a while, despite the low valuation (9X). With other stocks growing faster and doing better fundamentally, we would not see it as overly attractive yet. Negative momentum can continue at times. Its 52-week low is $85-ish. We would be more interested at $90.
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$93.24

Stock price when the opinion was issued

$159.23

As of Jun 17, 2026. Market Open.

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BUY

It reports Tuesday. The new CEO is turning things around and he likes the stock ahead of the quarter.

SELL

Take profits. Now that clouds have cleared, left with a lower-growth multi-industrial. Invest in a more structurally sound industrial company such as HON or the pieces of the former United Technologies.

DON'T BUY

They report soon and he expects a good report, but nobody will care. Big internationals are frowned upon, unless you hold through the cycle.

BUY

He bought it at 12x PE, now at 19x. The new CEO demonstrates they can change their business.

PARTIAL BUY

So much is about sentiment and the street expects a massive cut to earnings. We haven't seen their full-year estimates.

WEAK BUY

They're in the second inning of their turnaround, and shares remain cheap. Expectations remain low.

BUY

It's a turnaround story, so he initiated a position. He is selective in industrials, because they trade at a 24x forward PE, higher than the S&P.

BUY

It trades at only 17x PE in 3M, and it runs a diversified business.

DON'T BUY

Wait. Don't enter this now. Wants to see more clarity. Shares are climbing after a long malaise and they have a new CEO. But hey have legacy problems with a chemical and a huge lawsuit, and the noise suppression technology lawsuit. These types of companies do turn around, but he'd rather pay more for more certainty.

WEAK BUY

Large industrial with a medical component, and she likes that. Good job getting back on track. Dividend cut earlier this year.

She focuses more on Canadian companies, so take a look at CCL.B.

HOLD

Long-term underperformer and base-building, recently broke out. Resistance levels started to fall, one by one. Then big pop on earnings. One of the top-ranked stocks on RSI in the US universe, acting extremely well. Quite well supported, even through the correction of last week.

BUY

Last Friday, the CEO walked about areas that could see cost cuts and many segments that could grow faster. MMM is part of the rally broadening out of tech.

BUY

Just reported: beat earnings and revenues and free cash flow. Also, they guided a little higher. The CEO is focused on growing organic growth, free cash flow and operating margins, which is what happened and will do. She would still buy it.

BUY ON WEAKNESS

He thinks the CEO can continue to turn things around and expand operating margins.

BUY

The new CEO is doing what he must and has a good track record from L3Harris.

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Stockchase Insights3M Co.MMMBUY ON WEAKNESSJan 24, 2024

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