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3M (MMM) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, 3M (MMM) closed at $175.66, marking a -0.43% move from the previous day. This change lagged the S&P 500's daily loss of 0.39%. At the same time, the Dow added 0.12%, and the tech-heavy Nasdaq lost 0.1%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had gained 2.8% over the past month, lagging the Conglomerates sector's gain of 4.5% and the S&P 500's gain of 4.06% in that time.

MMM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.19, up 12.31% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.31 billion, up 2.42% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.56 per share and revenue of $31.89 billion. These totals would mark changes of -5.93% and -0.77%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MMM. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.17% higher. MMM is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MMM's current valuation metrics, including its Forward P/E ratio of 20.61. This represents a premium compared to its industry's average Forward P/E of 20.47.

We can also see that MMM currently has a PEG ratio of 2.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations was holding an average PEG ratio of 2.17 at yesterday's closing price.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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