Hey the best and brightest guys in the room, the ones that brought you the economic meltdown, downgraded 3M in early Dec at around 125. Ain't it great we have these smart people watching out for us? They are worth every penny of their 10 million dollar salaries and bonuses; they are Masters of the Universe and easily worth pay several hundred times us common folks. They are Gods.
Some how, wall street has decided what stocks are worth on some el-fako-grande thing called P/E then manipulate based upon some other made up numbers, trying to convince the world they "know" what the value is. The value is what ever someone is willing to pay for it. Looking at the Enterprise value of 3M ($94.91 Bil) to the number of outstanding shares (675 mil?) the value of 3M stock should be no less than about $140.
I doubt if morgan stanley stock analysts make 10 million dollars. Traders and those bring in money...yes. I'm afrain life doesn't run on the merit system...or we would not be paying 20 million a year to large males who never seem to grow up (aka...football players). When I think of it, we often bash CEO and other leaders of large organizations for their pay.....and never seem to fault pro ball athletes. I wonder, does the combined pay of football, basketball and baseball exceel that of say the fortune 500 leadership ?
"According to the BLS, stock market analysts working for companies related to securities and commodity exchanges earned an annual average wage of $114,430. Those working for brokerage houses and companies providing investment advice or portfolio management services earned an annual average wage of $112,830. Meanwhile, analysts for investment banks and security dealers earned an annual average salary of $102,220, and those working for mutual funds and related companies earned an average of $109,440 annually"
I saw the average salary of the pro sports teams ranged from 3.4 million to 1.4 million (interestingly, football was the lowest.)
all off topic...wall streeters are definately over paid. Personally, I try to steer my "business" away from all folks I think are abusive with pay....financial, sports and entertainment, and local high school teachers :)
I am pretty bright and I am putting my downgrade in now at 140. I don't believe MMM will move passed 154 in 2014. I think you will see 125 before you see 150. Stock is overvalued compared to the rest of the market. I simply looked at the historical PE average, expected EPS in 2014, the EV/EBITDA, and the overall multiples on the S&P500. Sorry to say that over the next 12 months, MMM has more downside risk than upside potential at these cashflow and EPS multiples.
Unfortunately you are using the past to predict the future. Stock prices are based on future returns and often have little to do with even the most recent past. What if I told you that from 1900 to 1999 there were 3 great bull markets, although the 1923 - 1930 one did not last as long as the other two. All were started by lower commodity prices due to over supply caused by huge investments during the prior cycle. Because of higher commodity prices that started in the late 1990's, which ultimately killed the last great bull, tons of money has been pouring into energy, mining and agriculture. These investments have caused a big decline in the commodity index and thus laying the ground work for the next boom. If you overlay stocks prices vs commodity prices 1900 - 1999 these periods are evident. Famous investor Jimmy Rodgers in his 2005 book on commodities talked about this phenomena.
I would say that MMM is sitting in the sweet spot and most of the estimates are too low especially as we go out over the next 5 years. There are always temporary pull backs associated with these great market moves; however, generally folks get out thinking they are saving their capital but never get back in for the big move. Example: In 1982 I held CL worth about 58 cents. By 2000 it was worth over $32. There were many stocks that had lower but very high returns.
Your analysis does NOT SQUARE with the companies 35% divi increase. Either they do not understand the "downside risk" or you don't understand the upside potential.
My experience is that truly bright folks do not claim to be so….even when asked!
fib: What a wimpy prognostication. I will certainly take $154, up another 10%. You are trying to paint MMM in a negative light and then make that statement???? Just plain wierd not bright like you brag to be!!!!!!!