CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We adjust our 12-month target to $110 from $100, valuing shares at 11x our 2025 EPS view (initiated at $10.00; 2024 EPS raised to $9.36 from $9.13). We apply a lower multiple than MMM’s five-year forward P/E average of 16x to reflect macro headwinds, as well as litigation risks stemming from safety and environmental issues with multiple 3M products. Despite a beat on Q4 sales and earnings, MMM shares are trading sharply lower, following the company’s softer-than-anticipated 2024 EPS guidance of $9.35-$9.75 (vs. $9.82 consensus). MMM posted adj-EPS of $2.42 vs. $2.18 (+11% Y/Y), $0.11 above consensus. Q4 sales declined by roughly 1%, with organic growth remaining in negative territory (-2% Y/Y). MMM’s 2024 outlook implies muted growth across its businesses, weighed down by expected weakness in consumer discretionary spending and softness from industrial end markets. Macro-related headwinds coupled with idiosyncratic challenges (lawsuits) inform our Hold opinion, despite the relatively discounted valuation.