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3M's Earnings Impress, Yet Analysts See Long Road Ahead With Cyclical Recovery And PFAS Risks
MMM3M(MMM) Benzinga·2024-10-23 17:57

Core Insights - Analysts have increased the price target for 3M Company following strong Q3 results, with adjusted net sales of 6.068billionandadjustedEPSof6.068 billion and adjusted EPS of 1.98, both exceeding consensus estimates [1] - 3M revised its FY24 adjusted EPS guidance to 7.20–7.20 – 7.30, slightly above the consensus of 7.26[1]−BofASecuritiesanalystraisedthepricetargetto7.26 [1] - BofA Securities analyst raised the price target to 160 from 143whilemaintainingaBuyrating,indicatingcautiousoutlookfor2025duetolimitedmacroeconomicvisibility[1][2]FinancialPerformance−3M′sadjustednetsalesforQ3were143 while maintaining a Buy rating, indicating cautious outlook for 2025 due to limited macroeconomic visibility [1][2] Financial Performance - 3M's adjusted net sales for Q3 were 6.068 billion, marginally above the consensus of 6.057billion[1]−AdjustedEPSforQ3was6.057 billion [1] - Adjusted EPS for Q3 was 1.98, exceeding the consensus estimate of 1.90[1]−FY24adjustedEPSguidancewasrevisedto1.90 [1] - FY24 adjusted EPS guidance was revised to 7.20 – 7.30from7.30 from 7.00 – 7.30[1]AnalystPerspectives−BofASecuritiesanalystnotedthat3M′scautiousstanceregarding2025reflectsmacroeconomicuncertaintiesratherthaninternalgrowthissues[1]−RBCCapitalMarketsanalystraisedthepricetargetto7.30 [1] Analyst Perspectives - BofA Securities analyst noted that 3M's cautious stance regarding 2025 reflects macroeconomic uncertainties rather than internal growth issues [1] - RBC Capital Markets analyst raised the price target to 100 from 99butmaintainedanUnderperformrating,citingongoingoperationalweaknesses[2]−Thefocusfor3M′sCEOisonreacceleratingorganicgrowth,withcyclicalleverageexpectedtodriveearningsgrowthinthenearterm[2]FutureOutlook−TherearefivecategoriesofunaddressedPFASliabilitiesthatcouldposeamulti−billiondollarriskto3M[3]−AdjustedEPSestimateshavebeenraisedto99 but maintained an Underperform rating, citing ongoing operational weaknesses [2] - The focus for 3M's CEO is on reaccelerating organic growth, with cyclical leverage expected to drive earnings growth in the near term [2] Future Outlook - There are five categories of unaddressed PFAS liabilities that could pose a multi-billion dollar risk to 3M [3] - Adjusted EPS estimates have been raised to 7.25 for FY24 and 7.90forFY25[3]−Currentsharepriceisdown3.917.90 for FY25 [3] - Current share price is down 3.91% at 126.58 [3]