uploads/2018/09/Part-2-Recommendations-1.png

3M Stock: Do Analysts See Any Upside?

By

Updated

Analysts’ consensus

Analysts’ interest in 3M (MMM) has been increasing in the past three months. Among the 17 analysts, 30% recommended a “buy,” 47% recommended a “hold,” and 23% recommended a “sell.”

Analysts’ consensus on 3M stock indicates a target price of $210.29. However, the stock is already trading 0.4% above the target price, which indicates that there’s limited upside in the stock unless positive news drives the stock up.

Article continues below advertisement

The fact that 3M made two downward revisions to its fiscal 2018 adjusted EPS guidance and the continued increase in raw material prices has become the major concern. The stronger US dollar could add more woes for 3M in upcoming quarters. As a result, analysts appear to be conservative and recommend a “hold.”

Individual brokerage firms’ views

  • J.P. Morgan (JPM) revised its target price on 3M to $195 from $190. However, the stock is trading 8.2% above the target price as of September 26.
  • Jefferies (JEF) cut 3M’s target price to $216.00, which implies a return potential of 2.3% over the closing price as of September 26.
  • Morgan Stanley (MS) rated 3M as “equal-weight” with a target price of $209. However, 3M is already trading 1% above the target price.

Investors could hold 3M indirectly by investing in the iShares U.S. Industrials ETF (IYJ), which has 3.5% of its portfolio in 3M as of September 26.

Advertisement

More From Market Realist