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3M (MMM) Stock Declines 18% YTD: What's Pulling it Down?
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Shares of 3M (MMM - Free Report) have declined 17.5% in the year-to-date period compared with the industry’s decrease of 10.3%. The downside is primarily due to supply-chain constraints and foreign-currency headwinds.
Image Source: Zacks Investment Research
Let’s delve deeper to unearth the factors that are affecting the stock’s performance.
Semiconductor supply-chain constraints on the automotive and consumer electronics end markets are weighing on the Transportation and Electronics segment performance. Supply-chain constraints and reduced manufacturing productivity are affecting margins at the Consumer segment. High raw material and logistics costs are also weighing on 3M’s operations. The company expects a headwind of approximately $225 million from high raw material and logistics costs in the third quarter of 2022. For the full year, the company expects a headwind of $750-$850 million.
Persistent weakness in 3M’s Safety and Industrial segment due to a decline in disposable respirator sales also weighed on its shares. COVID-related lockdowns in the Greater China region are also impacting the segment’s performance. Decline in COVID-related disposable respirator demand is weighing on the personal safety business within the Safety and Industrial segment. The company anticipates disposable respirator demand to continue to be weak through 2022. 3M expects a negative impact of $100-$200 million from decline in disposable respirator demand in 2022.
Given 3M’s vast international presence, foreign-currency headwinds are affecting its top line. Strengthening U.S. dollar had a 4-percentage point negative impact on the company’s sales in the second quarter. On the same ground, the company has reduced its earnings and sales forecast for the full year. 3M now anticipates total sales to decline 0.5-2.5% year over year from the previous expectation of an increase of 1-4%. The company anticipates organic sales growth of 1.5-3.5% compared with 2-5% expected earlier. The impact of foreign-currency translation is expected to be 4% on sales compared with 1% estimated earlier. 3M predicts adjusted earnings per share of $10.30-$10.80 for the full year compared with $10.75-$11.25 anticipated earlier.
Zacks Rank & Key Picks
3M currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the Conglomerates sector are as follows:
Carlisle Companies has an estimated earnings growth rate of 114.2% for the current year. Shares of CSL have rallied more than 27% in the year-to-date period.
Griffon Corporation (GFF - Free Report) flaunts a Zacks Rank #1. GFF delivered a trailing four-quarter earnings surprise of 104.6%, on average.
Griffon has an estimated earnings growth rate of 124.1% for the current year. Shares of GFF have gained more than 17% so far this year.
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3M (MMM) Stock Declines 18% YTD: What's Pulling it Down?
Shares of 3M (MMM - Free Report) have declined 17.5% in the year-to-date period compared with the industry’s decrease of 10.3%. The downside is primarily due to supply-chain constraints and foreign-currency headwinds.
Image Source: Zacks Investment Research
Let’s delve deeper to unearth the factors that are affecting the stock’s performance.
Semiconductor supply-chain constraints on the automotive and consumer electronics end markets are weighing on the Transportation and Electronics segment performance. Supply-chain constraints and reduced manufacturing productivity are affecting margins at the Consumer segment. High raw material and logistics costs are also weighing on 3M’s operations. The company expects a headwind of approximately $225 million from high raw material and logistics costs in the third quarter of 2022. For the full year, the company expects a headwind of $750-$850 million.
Persistent weakness in 3M’s Safety and Industrial segment due to a decline in disposable respirator sales also weighed on its shares. COVID-related lockdowns in the Greater China region are also impacting the segment’s performance. Decline in COVID-related disposable respirator demand is weighing on the personal safety business within the Safety and Industrial segment. The company anticipates disposable respirator demand to continue to be weak through 2022. 3M expects a negative impact of $100-$200 million from decline in disposable respirator demand in 2022.
Given 3M’s vast international presence, foreign-currency headwinds are affecting its top line. Strengthening U.S. dollar had a 4-percentage point negative impact on the company’s sales in the second quarter. On the same ground, the company has reduced its earnings and sales forecast for the full year. 3M now anticipates total sales to decline 0.5-2.5% year over year from the previous expectation of an increase of 1-4%. The company anticipates organic sales growth of 1.5-3.5% compared with 2-5% expected earlier. The impact of foreign-currency translation is expected to be 4% on sales compared with 1% estimated earlier. 3M predicts adjusted earnings per share of $10.30-$10.80 for the full year compared with $10.75-$11.25 anticipated earlier.
Zacks Rank & Key Picks
3M currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the Conglomerates sector are as follows:
Carlisle Companies (CSL - Free Report) sports a Zacks Rank #1 (Strong Buy). CSL pulled a trailing four-quarter earnings surprise of 28%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Carlisle Companies has an estimated earnings growth rate of 114.2% for the current year. Shares of CSL have rallied more than 27% in the year-to-date period.
Griffon Corporation (GFF - Free Report) flaunts a Zacks Rank #1. GFF delivered a trailing four-quarter earnings surprise of 104.6%, on average.
Griffon has an estimated earnings growth rate of 124.1% for the current year. Shares of GFF have gained more than 17% so far this year.