We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3M Announces Long and Near-Term Objectives on Investor Day
Read MoreHide Full Article
3M Company (MMM - Free Report) has hosted its Investor Day in St. Paul. CEO Mike Roman highlighted the company’s future priorities and financial targets for the next five years. The announcements seemed to have aided the company’s share price to gain 3.46%.
The company communicated that it’s four future priorities — Portfolio, Innovation, Transformation, and People and Culture — are key components of its 3M value model. These priorities are strengthening its capabilities to deliver high values to shareholders and customers.
3M also emphasized its capital-allocation strategies. In the next five years (2019-2023), the company anticipates spending approximately 30% of its capital on growth investments — with research & development expenses representing roughly 6% of sales and capital expenditures amounting to 5-5.5% of sales. In addition, another 30% of capital will be used for paying dividends while the rest 40% will be utilized for acquisitions and repurchase of shares.
Moreover, the company provided the long-term objectives for the 2019-2023 timeframe. Organic sales growth, in local currency, is anticipated to be 3-5% while the bottom line is predicted to increase 8-11%. Return on invested capital will be around 20% and free cash flow conversion will be roughly 100%.
It’s worth mentioning here that organic sales for 3M’s Health Care segment will likely grow by 4-6% during the 2019-2023 period while Safety & Graphics sales will increase by 3-6%, Industrial sales by 3-5%, Electronics & Energy sales by 2-6%, and Consumer sales by 2-4%, organically.
In addition to these long-term objectives, 3M provided financial forecasts for 2019. Total sales in the year are predicted to increase 1-3%, with organic sales (in local currency) growth of 2-4%. Earnings will likely be $10.60-$11.05 per share, reflecting year-over-year growth of 7-11% on an adjusted basis.
Spending on research and development will be roughly 6% of sales or $2 billion. Capital expenditure will total $1.7-$2 billion and shares worth $2-$4 billion will likely be repurchased during 2019. Return on invested capital will likely be 22-25% and free cash flow conversion will be 95-105%.
Zacks Rank & Stocks to Consider
With a market capitalization of $119.3 billion, 3M currently carries a Zacks Rank #4 (Sell). The company faces headwinds from inflation in input prices and high-interest expenses. Further, stiff competition and supply contract issues remain other concerns.
Year to date, the company’s share price has decreased 12.9% compared with 16.3% decline recorded by the industry.
Moreover, the company’s earnings estimates for 2018 and 2019 were lowered by six brokerage firms. In the past 30 days, the Zacks Consensus Estimate for earnings per share declined 2.9% to $9.96 for 2018 and 2.7% to $10.89 for 2019.
Some better-ranked stocks in the industry are Macquarie Infrastructure Company , Crane Company (CR - Free Report) and Federal Signal Corporation (FSS - Free Report) . While Macquarie Infrastructure currently sports a Zacks Rank #1 (Strong Buy), both Crane and Federal Signal carry a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for Crane and Federal Signal improved for the current year and remained unchanged for Macquarie Infrastructure. Further, average positive earnings surprise for the last four quarters was 3.85% for Macquarie Infrastructure, 5.04% for Crane and 21.18% for Federal Signal.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
3M Announces Long and Near-Term Objectives on Investor Day
3M Company (MMM - Free Report) has hosted its Investor Day in St. Paul. CEO Mike Roman highlighted the company’s future priorities and financial targets for the next five years. The announcements seemed to have aided the company’s share price to gain 3.46%.
The company communicated that it’s four future priorities — Portfolio, Innovation, Transformation, and People and Culture — are key components of its 3M value model. These priorities are strengthening its capabilities to deliver high values to shareholders and customers.
3M also emphasized its capital-allocation strategies. In the next five years (2019-2023), the company anticipates spending approximately 30% of its capital on growth investments — with research & development expenses representing roughly 6% of sales and capital expenditures amounting to 5-5.5% of sales. In addition, another 30% of capital will be used for paying dividends while the rest 40% will be utilized for acquisitions and repurchase of shares.
Moreover, the company provided the long-term objectives for the 2019-2023 timeframe. Organic sales growth, in local currency, is anticipated to be 3-5% while the bottom line is predicted to increase 8-11%. Return on invested capital will be around 20% and free cash flow conversion will be roughly 100%.
It’s worth mentioning here that organic sales for 3M’s Health Care segment will likely grow by 4-6% during the 2019-2023 period while Safety & Graphics sales will increase by 3-6%, Industrial sales by 3-5%, Electronics & Energy sales by 2-6%, and Consumer sales by 2-4%, organically.
In addition to these long-term objectives, 3M provided financial forecasts for 2019. Total sales in the year are predicted to increase 1-3%, with organic sales (in local currency) growth of 2-4%. Earnings will likely be $10.60-$11.05 per share, reflecting year-over-year growth of 7-11% on an adjusted basis.
Spending on research and development will be roughly 6% of sales or $2 billion. Capital expenditure will total $1.7-$2 billion and shares worth $2-$4 billion will likely be repurchased during 2019. Return on invested capital will likely be 22-25% and free cash flow conversion will be 95-105%.
Zacks Rank & Stocks to Consider
With a market capitalization of $119.3 billion, 3M currently carries a Zacks Rank #4 (Sell). The company faces headwinds from inflation in input prices and high-interest expenses. Further, stiff competition and supply contract issues remain other concerns.
Year to date, the company’s share price has decreased 12.9% compared with 16.3% decline recorded by the industry.
Moreover, the company’s earnings estimates for 2018 and 2019 were lowered by six brokerage firms. In the past 30 days, the Zacks Consensus Estimate for earnings per share declined 2.9% to $9.96 for 2018 and 2.7% to $10.89 for 2019.
3M Company Price and Consensus
3M Company Price and Consensus | 3M Company Quote
Some better-ranked stocks in the industry are Macquarie Infrastructure Company , Crane Company (CR - Free Report) and Federal Signal Corporation (FSS - Free Report) . While Macquarie Infrastructure currently sports a Zacks Rank #1 (Strong Buy), both Crane and Federal Signal carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for Crane and Federal Signal improved for the current year and remained unchanged for Macquarie Infrastructure. Further, average positive earnings surprise for the last four quarters was 3.85% for Macquarie Infrastructure, 5.04% for Crane and 21.18% for Federal Signal.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>