Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, 3M (MMM - Free Report) closed at $203.07, marking a +0.33% move from the previous day. The stock lagged the S&P 500's daily gain of 0.74%.

Coming into today, shares of the maker of Post-it notes, industrial coatings and ceramics had gained 3.42% in the past month. In that same time, the Conglomerates sector gained 5.69%, while the S&P 500 gained 3.21%.

In that report, analysts expect MMM to post earnings of $2.20 per share. This would mark year-over-year growth of 23.6%. Our most recent consensus estimate is calling for quarterly revenue of $8.41 billion, up 17.26% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.73 per share and revenue of $34.99 billion, which would represent changes of +11.33% and +8.71%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MMM. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.93% higher. MMM is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MMM's current valuation metrics, including its Forward P/E ratio of 20.8. This represents a discount compared to its industry's average Forward P/E of 21.63.

Meanwhile, MMM's PEG ratio is currently 2.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Diversified Operations was holding an average PEG ratio of 2.11 at yesterday's closing price.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 119, putting it in the top 47% 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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


3M Company (MMM) - free report >>

Published in