Industrial conglomerate 3M (NYSE:MMM) has reached a settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) with regard to a probe into sales by the company’s subsidiary to an Iranian entity in violation of sanctions imposed on the country.
Details of the OFAC Settlement
The OFAC noted that between September 2016 and September 2018, the company’s Swiss subsidiary, 3M East AG, sent 43 shipments of reflective license plate sheeting to a German reseller despite knowing that the products were meant for a sanctioned Iranian entity called Bonyad Taavon Naja. The Iranian entity was controlled by the Iranian Law Enforcement Forces.
The OFAC added that one U.S. employee of another 3M subsidiary played a major role in these sales. Nonetheless, the OFAC determined that the violations were “egregious” and acknowledged that the company voluntarily disclosed the matter to the authorities.
Overall, 3M has agreed to settle the potential civil liability for 54 violations of OFAC sanctions on Iran triggered by the aforementioned transactions.
Last month, 3M reached a $6.5 million settlement with the U.S. Securities and Exchange Commission (SEC) to resolve charges that it violated certain provisions of the Foreign Corrupt Practices Act. In particular, employees of the company’s China subsidiary arranged overseas conferences and other events for Chinese government officials employed by state-owned enterprises. These trips were essentially organized to provide the officials with overseas travel to entice them to purchase 3M products.
In August, 3M reached a $6.01 billion settlement with U.S. military service members who alleged that they suffered hearing loss from using the company’s earplugs.
Amid all these legal distractions, let’s have a look at Wall Street’s ratings for 3M stock.
Is 3M Stock a Good Buy Now?
Wall Street is sidelined on 3M stock, with a Hold consensus rating based on one Buy, 11 Holds, and two Sells. The average price target of $119.14 implies 22.2% upside potential. Shares are down about 19% year-to-date.
