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

Zacks Equity Research
·3 min read

In the latest trading session, 3M (MMM) closed at $166.62, marking a -1.83% move from the previous day. This move lagged the S&P 500's daily gain of 0.55%. Elsewhere, the Dow gained 0.18%, while the tech-heavy Nasdaq added 1.03%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had lost 2.17% over the past month, lagging the Conglomerates sector's gain of 3.18% and the S&P 500's gain of 3.13% in that time.

Wall Street will be looking for positivity from MMM as it approaches its next earnings report date. On that day, MMM is projected to report earnings of $2.18 per share, which would represent year-over-year growth of 11.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.35 billion, up 2.99% from the year-ago period.

Investors should also note any recent changes to analyst estimates for MMM. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.23% higher. MMM is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that MMM has a Forward P/E ratio of 17.97 right now. Its industry sports an average Forward P/E of 20.45, so we one might conclude that MMM is trading at a discount comparatively.

We can also see that MMM currently has a PEG ratio of 1.89. 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 2.61 at yesterday's closing price.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 224, putting it in the bottom 13% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Zacks Investment Research