3M Company Provides Outlook for 2022

3M Company (MMM) provided guidance for 2022 at its virtual strategic update meeting and said that it seeks sustainable long-term growth and shareholder value creation. The company manufactures and sells industrial, safety, and consumer products worldwide.

The company projects sales to grow 1% to 4%, which includes the organic sales growth of 2% to 5%. Further, earnings are expected to be between $10.15 per share and $10.65 per share and operating cash flow in the range of $7.3 to $7.9 billion.

While providing the outlook, 3M has considered an expected fall in COVID-19-related disposable respirator demand in 2022. The fall is likely to lower EPS by $0.45 and organic growth by 2%.

Furthermore, 3M plans to accelerate investments in attractive markets such as automotive, safety, home improvement, and healthcare. In 2022, the company will be investing about $4 billion in the combination of research and development and capital expenditures.

3M Chairman and CEO, Mike Roman, said, “We are well positioned for 2022 and beyond because of our customer-inspired innovation, industry-leading businesses, fundamental strengths, and world-class capabilities enabling us to win in fast-growing markets.”

“Building upon 9% organic growth in 2021, we expect to continue growing above the macro environment, while generating robust cash flow, expanding margins and strengthening our balance sheet. We continue to drive value through our strategic priorities: accelerating innovation, actively managing our portfolio, transforming our operating model with new digital capabilities and investing in our people and culture,” he added.

Wall Street’s Take

Last week RBC Capital analyst Deane Dray reiterated a Sell rating on the stock with a $155 price target, implying 1.9% downside potential to current levels.

Consensus among analysts is a Hold based on 1 Buy, 7 Holds and 4 Sells. The average 3M price target of $180.45 implies 14.2% upside potential to current levels.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on 3M, as 17.6% of investors on TipRanks increased their exposure to MMM stock over the past 30 days.

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