3M (MMM) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, 3M (MMM) closed at $104.29, marking a -0.02% move from the previous day. This change lagged the S&P 500's 1.3% gain on the day. Meanwhile, the Dow gained 0.98%, and the Nasdaq, a tech-heavy index, added 7.48%.
Coming into today, shares of the maker of Post-it notes, industrial coatings and ceramics had lost 7.68% in the past month. In that same time, the Conglomerates sector lost 3.36%, while the S&P 500 lost 2.95%.
Wall Street will be looking for positivity from 3M as it approaches its next earnings report date. The company is expected to report EPS of $1.62, down 38.87% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.46 billion, down 15.55% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8.65 per share and revenue of $31.45 billion, which would represent changes of -14.36% and -8.12%, respectively, from the prior year.
Any recent changes to analyst estimates for 3M should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. 3M is holding a Zacks Rank of #4 (Sell) right now.
Digging into valuation, 3M currently has a Forward P/E ratio of 12.06. For comparison, its industry has an average Forward P/E of 12.43, which means 3M is trading at a discount to the group.
Investors should also note that MMM has a PEG ratio of 1.27 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Diversified Operations stocks are, on average, holding a PEG ratio of 1.45 based on yesterday's closing prices.
The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 43% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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