3M and How Analysts Are Feeling about It



Analyst consensus on 3M

The number of analysts tracking 3M (MMM) is now 14, compared to 19 in June 2017. Among those 14 analysts, 29% have recommended a “buy, 50% have recommended a “hold,” and 21% have recommended a “sell.”

The analysts’ consensus suggests a target price of $219.80 for 3M stock. Since September, the target price has risen from $205.45 to the current target price. However, 3M stock as of December 6, 2017, was 8.6% higher than the recommended target price.

Why should investors ‘hold’ 3M?

3M posted strong 3Q17 earnings with a sales growth of 6% and EPS (earnings per share) growth of 8.4%. MMM also spent $380 million on share repurchases during the quarter, which should help add value to the remaining shareholders. MMM also raised its 2017 EPS guidance to $9–$9.10 against its earlier guidance of $8.80–$9.05. As a result, most analysts have recommended a “hold” for 3M stock.

Individual brokerage firms’ views

  • Goldman Sachs (GS) has rated 3M a “neutral” and recommended a target price of $229. However, MMM closed 4.2% above the recommended target price on December 6, 2017.
  • Morgan Stanley (MS) has recommended a target price of $209 for 3M, which is 12.4% lower than the closing price of $238.67 on December 6, 2017.
  • Credit Suisse (CS) has rated 3M an “outperform” with a target price of $260, which implies a return potential of 8.9% from the closing price on December 6, 2017.

Investors can hold 3M indirectly by investing in the iShares MSCI USA ESG Select (KLD), which has 3.8% of its portfolio in 3M as of December 6, 2017.

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