UBS maintains 3M stock Buy rating with $184 target post-earnings

On Wednesday, UBS analyst Amit Mehrotra reaffirmed a Buy rating and a $184.00 price target for 3M stock, traded on the NYSE under the ticker (NYSE:MMM). With a current market capitalization of $76 billion and trading at $140.20, InvestingPro data shows the stock is fairly valued based on its proprietary Fair Value model. The stock has demonstrated strong momentum, delivering a remarkable 50% return over the past year. Following the company’s first-quarter results and subsequent discussions with 3M, Mehrotra increased his 2025 earnings per share (EPS) estimate to $8.00, up from $7.93. This revision positions his forecast above the consensus estimate of $7.73. The company currently trades at a P/E ratio of 17x and maintains a dividend yield of 2.14%, with its next earnings report scheduled for April 22, 2025.

Mehrotra highlighted that 3M’s reiterated earnings guidance of $7.60 to $7.90 is a positive signal. Additionally, he pointed out that the guidance now accounts for roughly a 10-cent contingency or cushion that was not previously included. The analyst also noted the potential for an additional 15-cent upside based on current foreign exchange rates. He suggested that recent currency movements since Liberation Day could negate a 15-cent headwind to 2025 EPS, according to UBS estimates. The company maintains a "FAIR" overall financial health score according to InvestingPro metrics, with particularly strong marks in profitability.

The UBS analyst observed signs of 3M regaining market share, as indicated by improvements in on-time and in-full delivery performance, order trends, and the organic growth outlook. Mehrotra’s assessment is that these factors, combined with revenue and cost opportunities, could drive further upside for 3M shares.

Mehrotra concluded by reiterating his positive stance on 3M stock, maintaining it as a Buy recommendation and a Top Pick within UBS’s coverage universe. The endorsement from UBS comes after a detailed analysis of 3M’s recent performance and forward-looking prospects, suggesting confidence in the company’s ability to surpass market expectations.

In other recent news, 3M Company reported a strong start to the fiscal year 2025, with a notable 10% increase in adjusted earnings per share (EPS) for the first quarter, reaching $1.88. The company’s organic sales grew by 1.5%, and operating margins improved by 220 basis points year-over-year. Despite a challenging macroeconomic environment, 3M demonstrated resilience by maintaining financial strength, returning $1.7 billion to shareholders, and raising its dividend by 4%. The company also launched 62 new products, marking a 60% increase from the previous year. Additionally, 3M plans to increase share repurchases to $2 billion, indicating confidence in its future cash flows and financial stability. The firm provided guidance for the full year, forecasting an EPS range of $7.60 to $7.90, while anticipating tariffs to impact EPS by approximately $0.40 to $0.60. Analysts from Vertical Research Partners and JPMorgan discussed 3M’s strategies for tariff mitigation and potential demand destruction, noting the company’s efforts to control costs and enhance sourcing and pricing strategies.

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