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3M (MMM) Gains But Lags Market: What You Should Know

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3M (MMM - Free Report) closed at $165.70 in the latest trading session, marking a +1.55% move from the prior day. This change lagged the S&P 500's 2.02% gain on the day. Elsewhere, the Dow gained 1.6%, while the tech-heavy Nasdaq added 2.71%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had lost 0.13% over the past month, lagging the Conglomerates sector's gain of 0.11% and outpacing the S&P 500's loss of 0.39% in that time.

MMM will be looking to display strength as it nears its next earnings release. On that day, MMM is projected to report earnings of $2.15 per share, which would represent a year-over-year decline of 16.67%. Meanwhile, our latest consensus estimate is calling for revenue of $7.99 billion, down 0.02% from the prior-year quarter.

MMM's full-year Zacks Consensus Estimates are calling for earnings of $8.23 per share and revenue of $31.68 billion. These results would represent year-over-year changes of -9.56% and -1.43%, respectively.

Investors should also note any recent changes to analyst estimates for MMM. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. MMM is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MMM has a Forward P/E ratio of 19.83 right now. Its industry sports an average Forward P/E of 18.95, so we one might conclude that MMM is trading at a premium comparatively.

Meanwhile, MMM's PEG ratio is currently 2.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations industry currently had an average PEG ratio of 2.59 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 76, putting it in the top 30% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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