On Wednesday, Jefferies maintained a Hold rating on 3M (NYSE:MMM) and increased the stock price target for the company's shares to $105 from $100. This adjustment follows the release of 3M's first-quarter earnings, which surpassed both consensus estimates and Jefferies' own predictions.
3M reported earnings per share (EPS) of $2.39 for the first quarter, which was $0.29 higher than the consensus estimate and $0.36 more than Jefferies' forecast. Looking ahead, 3M's projected EPS for 2024 is set to range between $6.80 and $7.30, not accounting for contributions from Solventum. This projection is in contrast to Jefferies' estimate, which includes the first-quarter contribution from Solventum.
Despite expectations of continued softness in consumer demand, the company is experiencing upward trends in the construction and electronics sectors. Jefferies notes that 3M's introduction of new products and gains in market share are likely to contribute to sales growth.
Moreover, the benefits from the company's ongoing cost-cutting and restructuring efforts are expected to strengthen profit margins. Jefferies also mentioned that 3M's plan to exit the PFAS business is still on track to be completed by the end of the year 2025.
InvestingPro Insights
With the latest earnings surpassing expectations, 3M (NYSE:MMM) demonstrates financial metrics that could be of interest to investors. The company has a robust market capitalization of $53.68 billion and, despite a slight revenue decline in the last twelve months as of Q4 2023, maintains a significant gross profit margin of 43.77%.
This margin indicates the company’s ability to retain a large portion of sales as profit after accounting for the cost of goods sold.
Investors looking for income might note 3M’s attractive dividend yield of 6.26%, coupled with a modest dividend growth of 1.34%. The company’s commitment to shareholder returns is evident, with the ex-date of the last dividend being April 1, 2024. Moreover, the stock has experienced a positive price total return of 16.03% over the past year, suggesting a favorable trend for investors.
For those considering an investment, InvestingPro provides further insights with tips that delve into the company's valuation and potential. With a PRONEWS24 coupon code, investors can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable InvestingPro Tips. Currently, InvestingPro lists 15 additional tips for 3M, offering a comprehensive analysis beyond the core metrics presented here.
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