3M Co. (NYSE:MMM) continues to defend itself against allegations of contaminating soil and drinking water with its production process. The manufacturer of industrial, consumer, and safety products is preparing strong arguments for upcoming trials to reduce liability about its products.
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In a defensive step, the company has decided to stop producing “forever chemicals,” including the hazardous perfluoroalkyl and polyfluoroalkyl substances (PFAS). These chemicals have been used in industrial products like firefighting foam as well as consumer products like nonstick cookware and carpeting.
3M is likely to argue that the foam production was made for the U.S. military and is thus supposed to be covered legally.
To top it off, 3M is also battling lawsuits over military earplugs. About 230,000 veterans claimed that the earplugs failed to protect against service-related hearing loss. The company has countered these claims, saying that the earplugs are effective when soldiers know how to use them properly.
Legal experts and industry analysts estimate that 3M could face years of legal battles in order to address the risks that these chemicals released in the environment over many years. Liability costs are also expected to reach tens of billions of dollars, which can be a significant cash drain for the company.
Is MMM a Buy?
Wall Street is cautious of the stock, with a Hold consensus rating based on six Holds and two Sells. The average price target of $122 indicates a downside risk of 0.38%.
