Inside 3M’s Stock Performance since Its 4Q16 Results



3M set to announce its 1Q17 earnings

Minnesota-based 3M (MMM) is set to announce its 1Q17 earnings on April 25, 2017, before the market opens. In this series, we’ll look at 3M’s stock performance since its 4Q16 earnings release, analysts’ revenue forecasts, EPS (earnings per share) estimates, and recommendations to help investors make the best decisions.

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3M’s stock performance

On January 24, 2017, 3M announced its 4Q16 earnings. Between then and April 20, 2017, the stock has gained 8.6%. Industrial peers Honeywell (HON), General Electric (GE), and Stanley Black & Decker (SWK) have so far underperformed 3M, with returns of 4.9%, 0.9%, and 8.2%, respectively. MMM also managed to outperform the broad-based SPDR S&P 500 ETF (SPY), which has returned 3.4% during the same period.

The company’s stock performance was mainly driven by its EPS guidance for 2017, with the expectation to post EPS of $8.45–$8.80 for fiscal 2017. This implies an increase of 4%–8% on a year-over-year basis.

As part of 3M’s realignment plan, it divested its prescription eyewear and identity management businesses during this period. Positive business developments like the acquisition of Scott Safety from Johnson Controls (JCI) also have helped the stock rise.

Moving average and relative strength index

The company’s stock price gain since its 4Q16 earnings release has resulted in the widening of its 100-day moving average. The stock is now trading 4.7% above the 100-day moving average of $182.5, indicating an upward trend in the stock. It’s trading 17.2% higher than its 52-week low of $163.17 and 1.2% lower than its 52-week high of $193.50.

The stock’s 14-day RSI (relative strength index) score of 58 indicates that it’s neither oversold nor overbought. An RSI score of 70 means that a stock has moved temporarily into an “overbought” situation, whereas an RSI score below 30 indicates that a stock has moved temporarily into an “oversold” position.

In the next part, we’ll look into analysts’ estimates for 3M’s revenue in 1Q17.


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