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3M (MMM) Gains As Market Dips: What You Should Know

Zacks Equity Research

3M (MMM) closed the most recent trading day at $137.02, moving +1.92% from the previous trading session. This move outpaced the S&P 500's daily loss of 5.18%. Elsewhere, the Dow lost 6.3%, while the tech-heavy Nasdaq lost 4.7%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had lost 15.38% over the past month, outpacing the Conglomerates sector's loss of 30.2% and the S&P 500's loss of 24.68% in that time.

Investors will be hoping for strength from MMM as it approaches its next earnings release. In that report, analysts expect MMM to post earnings of $2.12 per share. This would mark a year-over-year decline of 4.93%. Our most recent consensus estimate is calling for quarterly revenue of $8.23 billion, up 4.67% from the year-ago period.

MMM's full-year Zacks Consensus Estimates are calling for earnings of $9.34 per share and revenue of $33.50 billion. These results would represent year-over-year changes of +2.64% and +4.25%, respectively.

Investors might also notice recent changes to analyst estimates for MMM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 1.68% lower. MMM is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, MMM is currently trading at a Forward P/E ratio of 14.39. For comparison, its industry has an average Forward P/E of 11.4, which means MMM is trading at a premium to the group.

We can also see that MMM currently has a PEG ratio of 1.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MMM's industry had an average PEG ratio of 1.59 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 20% 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.

To follow MMM in the coming trading sessions, be sure to utilize Zacks.com.


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