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On Friday, Citi analyst Andrew Kaplowitz adjusted the price target for 3M (NYSE:MMM) stock, increasing it to $160 from the previous $141, while maintaining a Neutral rating on the shares. Currently trading at $149.63 with a market capitalization of $80.5 billion, 3M has posted a strong year-to-date return of 17%. The revision follows a meeting with 3M’s management, during which the company’s direction under new leadership was discussed. According to InvestingPro data, the stock appears to be fairly valued at current levels.
Kaplowitz noted that 3M appears to be on a positive trajectory toward enhanced performance, citing a "renewed focus" by the company’s new management team. The analyst expressed confidence in 3M’s ability to generate improved margins, a belief supported by tangible signs of progress and what is described as a robust pipeline of general and administrative (G&A) as well as gross margin improvement opportunities.
While acknowledging these positive developments, Kaplowitz also pointed out areas where 3M still has to prove itself, particularly in terms of growth. The analyst suggested that while 3M’s renewed emphasis on innovation is promising, it may take time for such efforts to significantly drive growth. This is especially true given the current mixed economic climate and 3M’s comparatively lower exposure to major industry trends.
The increase in the target price reflects an adjustment of the target multiple on 3M by two times the price-to-earnings (P/E) ratio, which Kaplowitz believes is justified by the anticipated improved performance of the company.
In other recent news, 3M Company reported a strong start to the fiscal year with a 10% increase in adjusted earnings per share (EPS) for the first quarter of 2025, reaching $1.88. The company saw a 1.5% growth in organic sales and an improvement in operating margins by 220 basis points year-over-year. Additionally, 3M announced a settlement related to per- and polyfluoroalkyl substances (PFAS) claims in New Jersey, resulting in a pre-tax charge of approximately $285 million in the second quarter. The settlement includes a commitment of around $210 million for site-specific litigation and $75 million for broader claims. Shareholders recently re-elected 11 directors to the board and ratified PricewaterhouseCoopers LLP as the independent accounting firm for 2025. UBS maintained a Buy rating for 3M stock with a $184 target, citing positive earnings guidance and potential market share gains. The company plans to increase share repurchases to $2 billion, reflecting confidence in its financial stability.
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