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3M's (MMM) Board Approves Health Care Business Spin-Off
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3M Company’s (MMM - Free Report) board has approved the planned spin-off of its health care business into a separate public company.
The spun-off entity will become a standalone company and be renamed as Solventum Corporation. It will begin regular-way trading on NYSE on Apr 1, 2024, under the ticker SOLV, while 3M will continue to trade under the ticker MMM.
3M’s board has approved a distribution to the company’s shareholders of 80.1% of the outstanding shares of Solventum. The remaining 19.9% of outstanding shares of Solventum stock will be retained by 3M and will be monetized within five years after completion of the spin-off.
MMM shareholders will receive one share of Solventum stock for every four shares of 3M stock held on the record date for the distribution, Mar 18, 2024. The distribution is anticipated to take place before opening of trading on Apr 1, 2024, conditional on the fulfillment of remaining conditions.
The spin-off of 3M and its health care unit is expected to help each entity to flourish through better operational focus, capital allocation policies and financial flexibility. As noted, Solventum will serve a global addressable market worth about $93 billion, which is expected to grow in the range of 4-6% through 2026. The new entity will operate through four operating segments, which are Medical Surgical, Dental Solutions, Health Information Systems and Purification & Filtration.
Zacks Rank and Price Performance
3M currently carries a Zacks Rank #3 (Hold).
The company has been benefiting from strength in the advanced materials and OEM (Original Equipment Manufacturer) businesses within the Transportation and Electronics segment. However, MMM’s performance is being hurt by decreasing demand for disposable respirators within the Safety and Industrial unit. Softness in stationery and office businesses is adversely affecting the Consumer unit.
Image Source: Zacks Investment Research
In the past month, the stock declined 0.8% against the industry’s growth of 6.3%.
Stocks to Consider
Some better-ranked companies from the same space are discussed below.
It has a trailing four-quarter average earnings surprise of 42%. The Zacks Consensus Estimate for GFF’s fiscal 2024 earnings has increased 3.9% in the past 60 days.
Carlisle Companies Incorporated (CSL - Free Report) currently flaunts a Zacks Rank #1. CSL delivered a trailing four-quarter average earnings surprise of 7.6%. In the past 60 days, the Zacks Consensus Estimate for CSL’s 2024 earnings has increased 8.2%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the consensus estimate for PH’s fiscal 2024 earnings has improved 3.7%.
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3M's (MMM) Board Approves Health Care Business Spin-Off
3M Company’s (MMM - Free Report) board has approved the planned spin-off of its health care business into a separate public company.
The spun-off entity will become a standalone company and be renamed as Solventum Corporation. It will begin regular-way trading on NYSE on Apr 1, 2024, under the ticker SOLV, while 3M will continue to trade under the ticker MMM.
3M’s board has approved a distribution to the company’s shareholders of 80.1% of the outstanding shares of Solventum. The remaining 19.9% of outstanding shares of Solventum stock will be retained by 3M and will be monetized within five years after completion of the spin-off.
MMM shareholders will receive one share of Solventum stock for every four shares of 3M stock held on the record date for the distribution, Mar 18, 2024. The distribution is anticipated to take place before opening of trading on Apr 1, 2024, conditional on the fulfillment of remaining conditions.
The spin-off of 3M and its health care unit is expected to help each entity to flourish through better operational focus, capital allocation policies and financial flexibility. As noted, Solventum will serve a global addressable market worth about $93 billion, which is expected to grow in the range of 4-6% through 2026. The new entity will operate through four operating segments, which are Medical Surgical, Dental Solutions, Health Information Systems and Purification & Filtration.
Zacks Rank and Price Performance
3M currently carries a Zacks Rank #3 (Hold).
The company has been benefiting from strength in the advanced materials and OEM (Original Equipment Manufacturer) businesses within the Transportation and Electronics segment. However, MMM’s performance is being hurt by decreasing demand for disposable respirators within the Safety and Industrial unit. Softness in stationery and office businesses is adversely affecting the Consumer unit.
Image Source: Zacks Investment Research
In the past month, the stock declined 0.8% against the industry’s growth of 6.3%.
Stocks to Consider
Some better-ranked companies from the same space are discussed below.
Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter average earnings surprise of 42%. The Zacks Consensus Estimate for GFF’s fiscal 2024 earnings has increased 3.9% in the past 60 days.
Carlisle Companies Incorporated (CSL - Free Report) currently flaunts a Zacks Rank #1. CSL delivered a trailing four-quarter average earnings surprise of 7.6%. In the past 60 days, the Zacks Consensus Estimate for CSL’s 2024 earnings has increased 8.2%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the consensus estimate for PH’s fiscal 2024 earnings has improved 3.7%.