3M’s stock performance
As of September 26, 3M (MMM) stock continued to trade sideways and remained in the red. On a year-to-date basis, 3M stock has declined 10.3%. The stock has underperformed the broader market S&P 500 (SPY). However, 3M has still managed to outperform its peers. General Electric (GE) and Stanley Black & Decker (SWK) have declined 34.7% and 12.2%, respectively. Honeywell (HON) has gained 8.1% during the same period.
3M stock has fallen from the high of $258.6 to the current level. The downward trend was set after 3M made a downward revision to the upper band of its adjusted EPS. In the first quarter, 3M revised its adjusted EPS to $10.20–$10.45—compared to the earlier guidance of $10.20–$10.7. In the second quarter, 3M lowered its adjusted EPS guidance to $10.20–$10.45. Although the company cited divestitures for the downward revision, investors weren’t happy. 3M continues to face pressure from higher raw material costs and increased freight costs.
What could drive the stock up?
3M should be able to overcome the raw material cost increase by passing the cost to its clients. New business contracts could help boost its organic growth, which should help 3M post better earnings in upcoming quarters. A strong earnings performance could improve investors’ sentiments and drive the stock up.
Moving average and RSI
Currently, 3M is trading 3.5% above the 100-day moving average price of $203.08. However, 3M’s 100-day moving average price has declined from $237 to the current price, which indicates a declining trend in the stock. 3M’s 14-day RSI (relative strength index) of 52 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 an “overbought” position.