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3M (MMM)
NYSE:MMM
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3M
(NYSE:MMM)64Neutral
Positive Factors
Growth Initiatives
3M has outlined growth initiatives including R&D efficiency and improving customer churn through predictive analytics and service improvements.
Operational Strategy
3M is focused on improving operations and accelerating growth, with a sound strategy and better legal and regulatory background.
Negative Factors
Legal Challenges
The timeline for the first personal injury bellwether trial has been pushed out, delaying potential resolutions.
3M (MMM) vs. S&P 500 (SPY)
Market Cap
$79.19B
Dividend Yield1.94%
Average Volume (3M)4.34M
Price to Earnings (P/E)19.3
Beta (1Y)0.90
Revenue Growth-18.72%
EPS GrowthN/A
CountryUS
Employees61,500
SectorIndustrials
Sector Strength66
IndustryIndustrial Conglomerates
Share Statistics
EPS (TTM)7.55
Shares Outstanding542,900,000
10 Day Avg. Volume5,066,891
30 Day Avg. Volume4,341,243
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.39
Price to Cash Flow (P/CF)11.50
P/FCF Ratio11.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$156.17Price Target Upside5.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
3M Business Overview & Revenue Model
Company DescriptionFounded in 1902, Minnesota-based 3M Company manufactures and sells industrial, safety and consumer products worldwide. It operates through multiple business segments including, Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. The company offers its products directly to users and through various e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers.
How the Company Makes Money3M makes money through a diverse revenue model that encompasses several key segments. The Industrial segment is a significant contributor, providing products like tapes, abrasives, adhesives, and filtration solutions to various industries. The Safety and Graphics segment generates revenue from personal protective equipment, security products, and commercial graphics. The Health Care segment offers medical and surgical supplies, oral care solutions, and drug delivery systems. The Electronics and Energy segment provides materials for electronics manufacturing and energy solutions. The Consumer segment includes household products, office supplies, and stationery, such as the well-known Post-it and Scotch brands. 3M's earnings are supported by strategic partnerships and a strong global presence, allowing it to leverage its broad product portfolio and innovation to meet customer needs across diverse markets.
3M Financial Statement Overview
Summary
3M faces notable challenges in revenue and profitability metrics, with a negative growth trajectory and margins under pressure. The balance sheet reflects significant leverage, raising financial risk concerns. While cash flow generation remains positive, it has diminished, highlighting operational challenges.Income Statement
3M's TTM revenue has declined compared to previous years, and there is significant volatility in profitability metrics. The gross profit margin for TTM stands at 42.3%, which is respectable but accompanied by declining net and EBIT margins when analyzed over the years, reflecting profitability challenges. The revenue growth rate is negative, indicating a downturn in sales.55
Neutral
Balance Sheet
The company has a high debt-to-equity ratio of 3.39 in TTM, indicating a significant reliance on debt financing. Stockholders' equity has decreased considerably, leading to a weak equity ratio of 9.77%. These factors point to increased financial risk and potential instability, though the high asset base provides some cushion.40
Negative
Cash Flow
3M's TTM free cash flow is positive, but has seen a decline compared to previous years, reflecting reduced operational efficiency. The operating cash flow to net income ratio is concerning, indicating cash flow challenges relative to earnings. However, the company has managed its capital expenditures effectively.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 24.57B | 32.68B | 34.23B | 35.35B | 32.18B | Gross Profit |
| 10.13B | 14.20B | 15.00B | 16.56B | 15.58B | EBIT |
| 4.82B | -9.13B | 6.54B | 5.45B | 4.47B | EBITDA |
| 4.82B | -6.75B | 8.72B | 9.58B | 9.26B | Net Income Common Stockholders |
| 4.17B | -7.00B | 5.78B | 5.92B | 5.45B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 7.73B | 5.99B | 3.89B | 4.76B | 5.04B | Total Assets |
| 39.87B | 50.58B | 46.45B | 47.07B | 47.34B | Total Debt |
| 13.66B | 16.85B | 16.20B | 17.63B | 19.05B | Net Debt |
| 8.06B | 10.92B | 12.54B | 13.06B | 14.42B | Total Liabilities |
| 35.97B | 45.71B | 31.68B | 31.95B | 34.41B | Stockholders Equity |
| 3.84B | 4.81B | 14.77B | 15.12B | 12.93B |
| Cash Flow | Free Cash Flow | |||
| 638.00M | 5.07B | 3.84B | 5.85B | 6.61B | Operating Cash Flow |
| 1.82B | 6.68B | 5.59B | 7.45B | 8.11B | Investing Cash Flow |
| -3.21B | -1.21B | -1.05B | -1.32B | -580.00M | Financing Cash Flow |
| 1.10B | -3.15B | -5.35B | -6.14B | -5.30B |
3M Technical Analysis
Neutral
147.61
Price Trends
142.63
Positive
136.28
Positive
125.72
Positive
Market Momentum
1.38
Positive
50.30
Neutral
49.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMM, the sentiment is Neutral. The current price of 147.61 is below the 20-day moving average (MA) of 149.03, above the 50-day MA of 142.63, and above the 200-day MA of 125.72, indicating a neutral trend. The MACD of 1.38 indicates Positive momentum. The RSI at 50.30 is Neutral, neither overbought nor oversold. The STOCH value of 49.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MMM.
3M Risk Analysis
3M disclosed 15 risk factors in its most recent earnings report. 3M reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
3M Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $76.96B | 22.39 | 105.16% | 2.21% | -1.30% | 20.26% | |
78 Outperform | $62.80B | 40.77 | 8.53% | 0.53% | 13.94% | 13.02% | |
74 Outperform | $64.30B | 27.12 | 9.14% | 1.85% | 10.29% | 22.72% | |
68 Neutral | $135.18B | 23.89 | 596.13% | 2.13% | 5.05% | 2.73% | |
65 Neutral | $147.01B | 38.89 | 7.87% | 0.52% | -13.50% | -17.25% | |
64 Neutral | $79.19B | 19.31 | 108.62% | 1.94% | -18.72% | ― | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
MMM
3M
147.61
71.98
95.17%
DHR
Danaher
210.56
-41.25
-16.38%
EMR
Emerson Electric Company
115.84
7.99
7.41%
HON
Honeywell International
209.62
13.28
6.76%
ITW
Illinois Tool Works
261.05
6.66
2.62%
ROP
Roper Technologies
593.81
56.68
10.55%
3M Earnings Call Summary
Earnings Call Date: Jan 21, 2025 | % Change Since: 5.18% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive sentiment with strong financial performance in Q4 2024, improvements in innovation and product launches, and positive growth across all business groups. However, there are ongoing challenges in certain segments like Safety and Industrial, and external headwinds such as FX impacts and weaknesses in certain regions like EMEA. Despite these challenges, the guidance for 2025 suggests continued growth and improvement.Highlights
Strong Finish to 2024
Fourth quarter adjusted earnings per share was $1.68 on 2.1% organic revenue growth. The company generated free cash flow of $1.3 billion with conversion of 145%. Overall, the company delivered $7.30 in adjusted earnings per share for 2024, up 21% year-over-year.
Positive Growth Across All Business Groups
For the first time in 9 quarters, each business group drove positive adjusted organic growth, with 12 of 16 divisions posting positive growth compared to only 7 in the first quarter.
Innovation and Product Launches
In 2024, 3M launched 169 new products, up 32% over the prior year. They expect a double-digit increase in the number of launches for 2025, indicating a strong innovation pipeline.
Improvement in On-Time In-Full Metric
OTIF improved by 3 percentage points versus last year and 8 points versus 2022. Despite challenges, Consumer and Transportation and Electronics divisions are consistently delivering over 90% on time.
Guidance for 2025 Indicates Growth
3M expects organic sales growth of 2% to 3%, adjusted earnings per share of $7.60 to $7.90, and free cash flow conversion of approximately 100% for 2025.
Lowlights
Challenges in Safety and Industrial Segment
Safety and Industrial's on-time performance remains below expectations in the low 80s, indicating service level challenges.
Weakness in EMEA and Automotive
EMEA experienced a low single-digit decline due to a weak environment, including a high single-digit decline in auto builds.
FX Headwinds Impacting Margins
Fourth quarter adjusted operating margins were 19.7%, down 20 basis points year-over-year, primarily due to a $0.04 headwind from FX due to the significant recent U.S. dollar strength.
Company Guidance
During the 3M Q4 2024 earnings call, the company provided guidance for 2025, projecting organic sales growth of 2% to 3% and adjusted earnings per share between $7.60 and $7.90, reflecting a 4% to 8% increase. The free cash flow conversion is expected to be around 100%. In 2024, 3M achieved $1.68 in adjusted EPS for Q4, with a 2.1% organic revenue growth, and generated $1.3 billion in free cash flow with a conversion rate of 145%. The company returned $1.1 billion to shareholders during the quarter. For the full year 2024, adjusted EPS was $7.30, with a 1.2% organic sales growth and $4.9 billion in free cash flow, achieving a conversion rate of 111%. The company also plans to continue its operational excellence program, targeting a 2% net productivity improvement, and aims to further reduce inventory days from 94 to 75.3M Corporate Events
Business Operations and StrategyFinancial Disclosures
3M Unveils Strategic Plan at 2025 Investor Day
Positive
Feb 26, 2025
On February 26, 2025, 3M Company held its 2025 Investor Day in St. Paul, Minnesota, where it provided a strategic update and medium-term financial outlook. The company highlighted its plans to accelerate sales growth through innovation and operational excellence, aiming for an operating margin of approximately 25% by 2027 and high-single-digit EPS growth annually. 3M also outlined a capital deployment framework, focusing on investing in the business and returning at least $10 billion in cash to shareholders. These initiatives are expected to enhance 3M’s market positioning and deliver sustainable value to its stakeholders.
Executive/Board ChangesBusiness Operations and Strategy
3M Announces New Leadership Changes for March 2025
Positive
Feb 10, 2025
3M announced changes to its Board of Directors effective March 1, 2025, with the retirement of Michael F. Roman as Executive Chairman and the appointment of William M. Brown as the new Chairman. Additionally, David P. Bozeman was elected to the Board, bringing valuable experience in supply chains, manufacturing, and digital transformation, while Amy E. Hood decided not to stand for re-election. These changes signify a strategic move for 3M as it focuses on growth and operational excellence, with the new leadership expected to strengthen its market positioning.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.