U.S. Markets close in 6 hrs

3M Downgrade: Two Reasons to Be More Cautious

3M (MMM) is falling on Wednesday, even as the Industrial Select Sector SPDR (XLI) edges up 0.1%, following a bearish note from Jefferies. Analyst Laurence Alexander downgraded 3M to Hold from Buy, and shaved $30 off his price target, to $220, writing that he sees less room for its multiple to expand in a rising-interest-rate environment. Alexander writes that that we are now in a "long late-cycle period where consolidation, bottlenecks, structural improvements in behavior, and a steeper cost curve create opportunities for rallies in upstream and intermediate chemicals where multiples have fallen." The analyst expects early-cycle large cap stocks, such as 3M, to lag.