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3M (MMM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

3M (MMM) closed at $168.88 in the latest trading session, marking a +1.77% move from the prior day. This change outpaced the S&P 500's 0.03% gain on the day. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had gained 2.36% over the past month, outpacing the Conglomerates sector's gain of 1.01% and the S&P 500's gain of 2.25% 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 $2.57, down 0.39% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.19 billion, up 0.5% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.34 per share and revenue of $32.23 billion. These totals would mark changes of -10.71% and -1.64%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for MMM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.15% lower within the past month. MMM currently has a Zacks Rank of #3 (Hold).

In terms of valuation, MMM is currently trading at a Forward P/E ratio of 17.77. This represents a premium compared to its industry's average Forward P/E of 16.82.

We can also see that MMM currently has a PEG ratio of 1.87. 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. Diversified Operations stocks are, on average, holding a PEG ratio of 1.89 based on yesterday's closing prices.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 38, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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