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3M (MMM)
NYSE:MMM
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3M
(NYSE:MMM)
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Rating:53Neutral
Price Target:
$158.00
â–²(1.32% Upside)
The score is held back primarily by elevated leverage and uneven cash-flow/revenue consistency in the financials, alongside weak near-term technicals. This is partially offset by a relatively optimistic earnings call with improved operational execution, strong free-cash-flow conversion guidance, and capital return plans, though valuation looks demanding given the current growth profile and risk backdrop.
Positive Factors
Diversified business model
3M's broad, multi‑segment portfolio provides durable revenue diversification across end markets (healthcare, safety, industrial, electronics and consumer). This reduces single‑market cyclicality, lets the company allocate R&D and pricing power where margins are strongest, and supports steady cash generation over multi‑year cycles.
New product & innovation momentum
Rising NPI activity and strong adoption (sales of products launched in the last five years +23%) indicate structurally improving organic growth potential. Sustained product launches and higher NPVI support medium‑term revenue mix improvement, premium pricing, and a durable source of outperformance vs. macro headwinds.
Improving margins and operational execution
Substantive productivity gains (net productivity, OEE, OTIF improvements) and explicit margin guidance reflect structural operating improvements. Continued cost‑efficiency initiatives and volume/productivity tailwinds can sustain higher operating margins and cash flow conversion over the next several quarters if execution remains consistent.
Negative Factors
Elevated leverage
High leverage and a compressed equity base materially reduce financial flexibility and increase risk from shocks. Debt loads constrain capital allocation during pressure periods, amplify earnings volatility (high ROE partly due to low equity), and limit ability to absorb litigation, macro downturns or higher interest costs over the medium term.
Flat and uneven revenue growth
Stagnant top‑line despite pockets of acceleration means the company must rely on productivity and NPI to drive EPS. Flat revenues raise execution risk: margin gains can reverse if volume falters, and reliance on new product success and cost cuts makes sustainable revenue growth less certain over the next 2–6 months.
Ongoing litigation, PFAS and tariff/stranded‑cost risk
Persistent PFAS litigation and transition‑related liabilities, plus tariff and stranded‑cost exposure, create an uncertain multi‑year cash outflow profile. These structural legal and policy risks can produce sizable, unpredictable charges and constrain free cash flow and margin stability despite operational improvements.
3M (MMM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$83.96B
Dividend Yield1.82%
Average Volume (3M)3.01M
Price to Earnings (P/E)26.3
Beta (1Y)0.99
Revenue Growth-13.09%
EPS Growth-20.63%
CountryUS
Employees61,500
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)1.83
Shares Outstanding531,225,040
10 Day Avg. Volume4,896,871
30 Day Avg. Volume3,006,230
Financial Highlights & Ratios
PEG Ratio-1.30
Price to Book (P/B)18.02
Price to Sales (P/S)3.43
P/FCF Ratio61.28
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.64
Enterprise Value/Gross Profit9.20
Enterprise Value/Ebitda15.51
Forecast
1Y Price Target
$175.40Price Target Upside12.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)8.67
Revenue Forecast (FY)$25.17B
3M Business Overview & Revenue Model
Company Description3M Company operates as a diversified technology company worldwide. It operates through four segments: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. The Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; autobody repair solutions; closure systems for personal hygiene products, masking, and packaging materials; electrical products and materials for construction and maintenance, power distribution, and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye, and fall protection solutions; and natural and color-coated mineral granules for shingles. The Transportation and Electronics segment provides ceramic solutions; attachment tapes, films, sound, and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; and reflective signage for highway, and vehicle safety. The Healthcare segment offers food safety indicator solutions; health care procedure coding and reimbursement software; skin, wound care, and infection prevention products and solutions; dentistry and orthodontia solutions; and filtration and purification systems. The Consumer segment provides consumer bandages, braces, supports and consumer respirators; cleaning products for the home; retail abrasives, paint accessories, car care DIY products, picture hanging, and consumer air quality solutions; and stationery products. It offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers. The company was founded in 1902 and is based in St. Paul, Minnesota.
How the Company Makes Money3M generates revenue through multiple streams, primarily by selling a vast array of products across its various business segments. The company operates in four main sectors: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. Each segment contributes to its overall revenue through the sale of specialized products and solutions tailored to specific industry needs. Key revenue streams include the sale of industrial adhesives and tapes, personal protective equipment, and healthcare products like wound care and infection prevention solutions. 3M's strong focus on innovation helps maintain a competitive edge, allowing it to command premium pricing for its technologically advanced products. The company also benefits from strategic partnerships and collaborations with other businesses and organizations, enhancing its reach and distribution capabilities. Additionally, 3M often engages in licensing agreements and provides consulting services, which further diversifies its income sources.
3M Key Performance Indicators (KPIs)
Any
Net Sales by Segment
Shows sales performance across different business segments, highlighting which areas are driving growth and which may need strategic adjustments.
Shows sales performance across different business segments, highlighting which areas are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The Fly3M Earnings Call Summary
Earnings Call Date:Jan 20, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call emphasized clear operational improvements, strong margin expansion, robust free cash flow and capital returns, and accelerating commercial excellence and innovation delivery. Management provided constructive 2026 guidance (higher organic growth, modest margin expansion, and EPS upside) and articulated a multi-year transformation plan to further improve margins and portfolio focus. Key near-term headwinds include consumer softness, auto aftermarket weakness, tariff and stranded-cost pressure, and ongoing litigation/PFAS risk. Overall, the company presented measurable progress and a positive outlook while acknowledging identifiable near-term risks.Q4-2025 Updates
Positive Updates
Organic Sales Growth and Acceleration
Q4 organic sales growth of 2.2% and full-year organic growth of ~2.1% (company noted growth accelerated from ~1.5% H1 to 2.7% H2). Company expects ~3% organic growth in 2026, reflecting acceleration vs. 2025.
Margin Expansion and Earnings
Fourth-quarter adjusted operating margin of 21.1% (up 140 bps QoQ/YoY in the quarter) and full-year adjusted operating margin of 23.4% (up ~200 bps year-over-year). Q4 adjusted EPS was $1.83 (up ~9%); company reported full-year EPS growth of ~10% (company cited total EPS of $8.6 and earlier referenced adjusted EPS growth to ~$8.06). Guidance for 2026 EPS: $8.50–$8.70 and margin expansion of 70–80 bps.
Strong Free Cash Flow and Capital Returns
Adjusted free cash flow conversion ~130% in the quarter and slightly above 100% for the full year. Returned $4.8 billion to shareholders in 2025 (approximately $1.6 billion dividends and $3.2 billion gross share repurchases). Company plans ~ $2.5 billion gross repurchase in 2026.
Commercial Excellence & Innovation Momentum
Launched 284 new products in 2025 (up 68% vs. 2024) and targets ~350 launches in 2026. Sales of products launched in the last five years increased ~23% for the full year and exited Q4 at 44% growth, with NPVI at 13% (about 2 percentage points above start of year). Company expects NPI and commercial initiatives to drive a material portion of outperformance vs. macro (company cited ~ $300M+ outperformance vs. macro in 2026 with roughly half from NPI).
Operational Excellence Metrics
On-time-in-full (OTIF) above 90% (up 300 bps year-over-year and sustained for seven months), overall equipment effectiveness (OEE) ~63% (up ~300 bps across assets covering ~70% of production volume), and cost of poor quality improved to ~6% of cost of goods (down ~100 bps YoY) with targets of 5.4% in 2026 and <4% over time.
Segment & Geographic Strengths
Safety & Industrial (SIBG) Q4 organic sales +3.8% and full-year SIBG +3.2%; Transportation & Electronics Q4 organic +2.4% (full-year +2%); China grew mid-single digits and India grew mid-teens; U.S. and Europe delivered low-single-digit growth for the year.
Productivity & Operating Income Drivers
Full-year operating profit expansion driven by ~$200M from volume and ~$550M of net productivity in 2025. Company expects higher productivity in 2026 (~$600M) and incremental volume contribution versus 2025, supporting margin expansion and EPS guidance.
Negative Updates
Consumer Business Weakness
Consumer Business Group (CBG) Q4 organic sales declined ~2.2%; full-year CBG revenue down ~0.3%. Management cited weak U.S. consumer sentiment, sluggish retail traffic, elevated channel inventory early in Q4, and promotional activity that pressured Q4 results.
Auto and Automotive Aftermarket Softness
Auto and auto aftermarket remained soft; certain commercial vehicle/auto categories were down high-teens in the quarter, and auto build rates remain a watch item for 2026 (autobuilds noted weaker in Q4, with China contributing to softness).
Tariff Headwinds and Stranded Costs
Q4 included roughly a $100 million headwind from gross tariff impacts and stranded costs. Company expects stranded costs to increase (company cited stranded costs rising from ~$100M in 2025 to ~ $150M in 2026) and continues to carry tariff-related pressure into early 2026 (carryover effects embedded in guidance).
Ongoing Litigation, PFAS and Transition Items
Management flagged ongoing PFAS and litigation docket as risks. 2025 included significant litigation-related items and management expects litigation-related costs to be 'in line' in 2026. Corporate and other income expected to be lower by $50–$75M (20–30 bps) largely from wind-down of transition services tied to Solventum.
Transformation and One-time Charges
Company took a $55 million Q4 charge for transformation investments (excluded from adjusted results). Management signaled additional transformation investments (~$225M incremental in 2026) as part of multi-year footprint and structural cost reengineering, which will create near-term costs and multi-year payback.
Market and Macro Uncertainty (Tariff Risk in Europe)
Macro softness (U.S. and China IPI decelerations) remains a headwind and potential new tariffs (e.g., proposed tariffs between U.S. and certain European countries) were not included in guidance; management estimated a possible incremental nominal impact (order of tens of millions of dollars) if new tariffs were enacted, but that is uncertain and not currently embedded.
Company Guidance
3M guided to roughly 3% organic sales growth in 2026, adjusted operating margin expansion of 70–80 basis points (total company income up about $400M at the midpoint), diluted EPS of $8.50–$8.70, and adjusted free cash flow conversion greater than 100%. Management expects business-group margin expansion of over $450M (≈100 bps) driven by roughly $875M of volume and net productivity, partially offset by PFAS, stranded costs, tariff impacts and an incremental $225M of growth/productivity investments, with corporate & other income down $50–75M. They said sales growth should accelerate through the year (SIBG+TEBG >3% in Q1), EPS/margin expansion should be evenly split between halves, and plan to deploy capital including ~ $2.5B of gross share repurchases in 2026.3M Financial Statement Overview
Summary
Profitability has rebounded from 2023 with solid margins, but revenue is largely flat/uncertain and cash-flow momentum has been inconsistent. The balance sheet is the main constraint: leverage remains elevated with a compressed equity base, reducing flexibility if profits soften.Income Statement
Profitability improved sharply versus 2023 (return to positive net income in 2024–2025), and 2025 still shows solid gross and operating margins (about 40% gross margin and ~20% EBIT margin). However, the earnings profile is volatile (large loss in 2023), and 2025 profitability stepped down from 2024 (net margin fell from ~17% to ~13%). Revenue is essentially flat over multiple years, with 2025 growth appearing unusually high versus the prior year and not reflected in the revenue levels shown, which adds uncertainty to the growth narrative.58
Neutral
Balance Sheet
Leverage is elevated: debt-to-equity is high in 2024–2025 (roughly 3.6x and 2.7x) with a relatively small equity base versus total debt. While total debt has come down from 2023, equity remains compressed compared with earlier years (notably 2020–2022), leaving less balance-sheet flexibility. Return on equity is very high in 2024–2025, but that is partly driven by low equity rather than purely stronger underlying economics, increasing risk if profits weaken.42
Neutral
Cash Flow
Free cash flow is positive and improved in 2025 versus 2024, and cash generation relative to net income is decent in 2025 (free cash flow is ~61% of net income). That said, cash conversion has weakened versus earlier years (2020–2022), operating cash flow is modest relative to the earnings base in 2024–2025, and free cash flow growth is negative in 2024 and 2025—suggesting less consistent cash momentum despite the earnings recovery.50
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 24.95B | 24.57B | 24.61B | 34.23B | 35.35B |
| Gross Profit | 9.87B | 10.08B | 9.57B | 14.97B | 16.61B |
| EBITDA | 5.85B | 7.22B | -8.91B | 8.72B | 9.58B |
| Net Income | 3.25B | 4.17B | -7.00B | 5.78B | 5.92B |
Balance Sheet | |||||
| Total Assets | 37.73B | 39.87B | 50.58B | 46.45B | 47.07B |
| Cash, Cash Equivalents and Short-Term Investments | 5.93B | 7.73B | 5.79B | 3.89B | 4.76B |
| Total Debt | 12.94B | 13.66B | 16.75B | 16.86B | 18.31B |
| Total Liabilities | 32.99B | 35.97B | 45.71B | 31.68B | 31.95B |
| Stockholders Equity | 4.75B | 3.84B | 4.81B | 14.72B | 15.05B |
Cash Flow | |||||
| Free Cash Flow | 1.40B | 638.00M | 5.07B | 3.84B | 5.85B |
| Operating Cash Flow | 2.31B | 1.82B | 6.68B | 5.59B | 7.45B |
| Investing Cash Flow | 1.35B | -3.21B | -1.21B | -1.05B | -1.32B |
| Financing Cash Flow | -4.02B | 1.10B | -3.15B | -5.35B | -6.14B |
3M Technical Analysis
Negative
155.94
Price Trends
164.93
Negative
161.65
Negative
154.33
Positive
Market Momentum
-1.64
Positive
38.87
Neutral
23.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMM, the sentiment is Negative. The current price of 155.94 is below the 20-day moving average (MA) of 163.07, below the 50-day MA of 164.93, and above the 200-day MA of 154.33, indicating a neutral trend. The MACD of -1.64 indicates Positive momentum. The RSI at 38.87 is Neutral, neither overbought nor oversold. The STOCH value of 23.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MMM.
3M Risk Analysis
3M disclosed 15 risk factors in its most recent earnings report. 3M reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
3M Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $140.25B | 23.27 | 35.85% | 2.24% | 7.48% | 9.55% | |
76 Outperform | $82.96B | 36.50 | 10.91% | 1.58% | 2.97% | 18.14% | |
71 Outperform | $75.05B | 25.10 | 91.71% | 2.43% | -0.41% | -10.88% | |
71 Outperform | $8.80B | 38.45 | 14.90% | 0.63% | 1.23% | -22.77% | |
67 Neutral | $166.52B | 46.68 | 7.05% | 0.53% | 2.22% | -7.60% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
53 Neutral | $83.96B | 26.34 | 75.68% | 1.82% | -13.09% | -20.63% |
* Industrials Sector Average
MMM
3M
155.94
4.40
2.90%
DHR
Danaher
224.54
2.85
1.29%
EMR
Emerson Electric Company
148.42
20.16
15.72%
HON
Honeywell International
216.64
10.05
4.86%
ITW
Illinois Tool Works
258.25
2.85
1.12%
VMI
Valmont
444.94
113.54
34.26%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.