3M (MMM) reported robust results for the second quarter and raised its FY24 forecast. The industrial conglomerate posted adjusted earnings of $1.93 per share, a 39% increase year-over-year, surpassing analysts’ consensus estimate of $1.68 per share.
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Adjusted sales grew 1.1% year-over-year, reaching $6 billion, exceeding analysts’ expectations of $5.85 billion.
3M Shows Signs of a Strong Comeback
Shares of 3M rose following these strong results. The company appears to be on a rebound after reducing its global workforce by 10% last year and adopting an export-led business model. Additionally, 3M closed several facilities and spun off Solventum (SOLV) to manage a slowdown in demand.
3M is now focusing on high-growth areas such as automotive electrification and climate technology while exiting less profitable consumer product lines. Under new CEO Bill Brown, 3M aims to cut costs and leverage steady price increases to counter slow demand in the consumer and industrial sectors.
3M’s FY24 Outlook
Management now expects total sales to decline by 0.25% or increase by 1.75% year-over-year in FY24. Adjusted earnings for FY24 are likely to be in the range of $7 to $7.30 per share, compared to the prior forecast of $6.80 to $7.30 per share.
Is MMM a Good Stock to Buy?
Analysts remain cautiously optimistic about MMM stock, with a Moderate Buy consensus rating based on six Buys, three Holds, and one Sell. Over the past year, MMM has increased by more than 10%, and the average MMM price target of $112.80 implies an upside potential of 9.1% from current levels. These analyst ratings are likely to change following MMM’s results today.
