3M divests more
On December 11, 2017, 3M (MMM) and Corning (GLW) entered into a definitive agreement regarding 3M’s Communication Markets Division. Corning will take over this division for $900 million—subject to customary regulatory approvals. The sale is expected to be completed in 2018. The business had annual revenue of $400 million.
3M’s Communication Markets Division includes structured cabling solutions as well as telecommunications solutions for optical fiber and copper passive connectivity. Ashish Khandpur, 3M’s executive vice president of the Electronics and Energy Business Group, said, “After completing a thorough strategic review, we believe that this business will be well positioned with Corning. I want to thank our Communication Markets Division team for their outstanding contributions.”
Through this sale, 3M is expected to gain ~$0.40 per share.
3M’s stock performance
3M’s stock price fell 0.1% marginally and closed at $238.00. 3M traded 9.0% above the 100-day moving average price of $218.31, which indicates an upward trend in the stock. On a year-to-date basis, 3M has risen 33.30%. Among its peers, General Electric (GE) has fallen ~44%, while Honeywell (HON) and Deere (DE) have risen 33.0% and 45.0%, respectively. Analysts’ consensus projected 3M’s target price to be at $223. However, the stock price is already trading 6.70% above the target price. 3M’s 14-day relative strength index of 57 indicates that the stock isn’t overbought or oversold.
Investors can hold 3M indirectly by investing in the SPDR Dow Jones Industrial Average ETF (DIA), which has invested 6.70% of its portfolio in 3M as of December 15, 2017.