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3M on the Street: What the Analysts Say ahead of the 1Q17 Earnings

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Apr. 25 2017, Updated 7:36 a.m. ET

Analysts’ recommendations for 3M

As of April 19, 2017, 18 brokerage firms were actively tracking 3M (MMM) stock. Among them, 44% of the analysts recommended the stock as a “buy,” while 39% of the analysts recommended the stock as a “hold,” and the remaining 17% of the analysts recommended the stock as a “sell.”

The analyst consensus indicates a 12-month target price for 3M at $190.50, and this implies a return potential of 0.4% from the stock’s closing price of $189.83 on April 19, 2017.

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Why are so many analysts optimistic?

The company posted better-than-expected 4Q16 earnings, primarily due to better operating expenses and to 3M’s reaffirmation of its fiscal 2017 GAAP (generally accepted accounting principles) EPS (earnings per share) guidance range of $8.45–$8.80. Positive business developments such as acquisitions and new product launches could have also caused analysts to remain positive on the stock.

Recommendations and target prices

Below are some of the recommended target prices from well-known brokerage firms for 3M:

  • On April 18, 2017, Jefferies rated 3M as “buy” and raised the target price of 3M to $219, which implies a 12-month return of 15.4%, as compared to its closing price of  $189.83 on April 19, 2017.
  • On April 17, 2017, Barclays (BCS) announced the target price of 3M to be at $201, which implies a 12-month potential return of 5.6%, as compared to its closing price of $189.83 on April 19.
  • On March 20, 2017, Credit Suisse (CS) announced the target price of 3M to be at $203, which implies a 12-month potential return of 7.0%, as compared to its closing price of $189.83 on April 19.

Notably, investors can indirectly hold 3M by investing in ETFs, such as the ProShares Ultra Dow30 (DDM), which has 4.8% of its portfolio in 3M. DDM’s top holdings include Goldman Sachs (GS), which had a weight of 5.4% on April 19.

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