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3M and How Analysts Are Feeling about It

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Dec. 7 2017, Updated 12:15 p.m. ET

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.

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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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