3M’s stock performance
As of August 30, 3M’s (MMM) stock price has declined 10.6% in 2018. In comparison, General Electric (GE) and Stanley Black & Decker’s (SWK) stock prices have declined 25.7% and 14.9%, respectively. In contrast, Honeywell (HON) has gained 4.5%. 3M has underperformed the broader market. The S&P 500 (SPY) has gained ~9.0% year-to-date.
3M stock took a beating after it downgraded its earnings outlook for fiscal 2018 in its first-quarter earnings release. Although 3M met analysts’ expectations, the outlook pushed the stock prices down. In the first-quarter earnings, 3M revised its adjusted EPS for fiscal 2018 to $10.20–$10.55—compared to the earlier guidance of $10.20–$10.70. In the second quarter, 3M’s earnings beat analysts’ estimates. However, 3M downgraded the earnings for fiscal 2018. Now, the earnings are $10.20–$10.45. Although 3M cited divestitures as the main reason for the downward revision, investors aren’t happy. Analysts’ consensus suggests little upside from the current price.
However, positive business developments, like new business contracts, could drive the organic growth. A strong performance in the remaining quarters in 2018 could drive the stock prices up and recover some lost ground.
Moving average and RSI
Currently, 3M is trading above the 100-day moving average price of $203.08. However, 3M’s 100-day moving average price has declined from $232 to the current price, which indicates a declining trend in the stock. 3M’s 14-day RSI (relative strength index) of 62 suggests that the stock isn’t overbought or oversold. An RSI of 30 and below suggests that the stock temporarily moved into an oversold position, while an RSI of 70 and above indicates that the stock temporarily moved into the overbought position.