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3M (MMM) Gains As Market Dips: What You Should Know

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In the latest trading session, 3M (MMM - Free Report) closed at $98.57, marking a +0.32% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.04%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq added 2.93%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had gained 2.29% over the past month, lagging the Conglomerates sector's gain of 3.31% and the S&P 500's gain of 4.22% in that time.

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 $1.68, down 32.26% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.84 billion, down 9.91% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.64 per share and revenue of $32.07 billion, which would represent changes of -14.46% and -6.3%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for 3M. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.19% lower within the past month. 3M is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note 3M's current valuation metrics, including its Forward P/E ratio of 11.37. For comparison, its industry has an average Forward P/E of 15.21, which means 3M is trading at a discount to the group.

It is also worth noting that MMM currently has a PEG ratio of 1.2. 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. MMM's industry had an average PEG ratio of 1.78 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 165, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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