3M (NYSE: MMM) recently reported its Q3 results, with revenues falling below and earnings beating the street estimates, and we believe that MMM stock has room for growth, as discussed below. The company reported adjusted revenue of $8.0 billion and adjusted earnings of $2.68 per share, compared to the consensus estimates of $8.2 billion and $2.48, respectively. In this note, we discuss 3M’s stock performance, key takeaways from its recent results, and valuation.
MMM stock has suffered a sharp decline of 50% from levels of $175 in early January 2021 to around $90 now, vs. an increase of about 10% for the S&P 500 over this roughly three-year period. Notably, MMM stock has underperformed the broader market in each of the last three years. Returns for the stock were 2% in 2021, -32% in 2022, and -24% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 9% in 2023 – indicating that MMM underperformed the S&P in 2021, 2022, and 2023.
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