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3M (MMM) Dips More Than Broader Markets: What You Should Know

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3M (MMM - Free Report) closed the most recent trading day at $98.99, moving -1.24% from the previous trading session. This change lagged the S&P 500's 0.94% loss on the day. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 1.53%.

Heading into today, shares of the maker of Post-it notes, industrial coatings and ceramics had gained 1.75% over the past month, lagging the Conglomerates sector's gain of 2.69% and the S&P 500's gain of 1.85% in that time.

Investors will be hoping for strength from 3M as it approaches its next earnings release. The company is expected to report EPS of $2.36, down 12.27% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.02 billion, down 6.91% from the prior-year quarter.

MMM's full-year Zacks Consensus Estimates are calling for earnings of $8.95 per share and revenue of $32.04 billion. These results would represent year-over-year changes of -11.39% and -6.4%, respectively.

Investors should also note any recent changes to analyst estimates for 3M. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. 3M is currently a Zacks Rank #2 (Buy).

Digging into valuation, 3M currently has a Forward P/E ratio of 11.2. Its industry sports an average Forward P/E of 16.61, so we one might conclude that 3M is trading at a discount comparatively.

Also, we should mention that MMM has a PEG ratio of 1.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Diversified Operations industry currently had an average PEG ratio of 1.97 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 113, which puts it in the top 45% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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