3M (NYSE:MMM) gained in trading after its Q1 earnings topped estimates. The adhesives and safety equipment company reported Q1 adjusted earnings of $2.39 per share, up by 21.3% year-over-year, handily beating Street estimates of $1.99 per share.
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The company reported sales of $8 billion, down by 0.3% year-over-year, surpassing analysts’ expectations of $7.62 billion.
3M’s Q1 results included its Health Care business segment, Solventum (NYSE:SOLV). The spin-off of Solventum was completed on April 1- the first business day of the second quarter. Moreover, in the first quarter, MMM reached a settlement of $10.3 billion with the U.S. public water suppliers in the PFAS chemicals case.
Furthermore, management announced William ‘Bill’ Brown as the CEO of the company effective from May 1 onwards, while Mike Roman will transition to the role of Executive Chairman.
3M’s Dividend ‘Reset’ and FY24 Guidance
3M stated that it will adjust its dividend after the spin-off of its healthcare business, aiming for the dividend to represent 40% of its free cash flows annually. Over the past four quarters, 3M has paid a dividend of $6.01.
Looking forward to FY24, management now expects adjusted organic sales to be flat year-over-year or to increase by 2%. Adjusted earnings are forecasted to be between $6.80 and $7.30 per share.
Is MMM a Buy or Sell?
Analysts remain bullish about MMM stock, with a Strong Buy consensus rating based on 33 Buys and one Hold and Sell each. Over the past year, MMM has increased by more than 10%, and the average MMM price target of $487.87 implies an upside potential of 21.3% from current levels. These analyst ratings are likely to change following MMM’s Q1 results today.
