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Can 3M Sustain Operating Margin Momentum Amid Sales Growth?
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Key Takeaways
3M's Q3 operating income rose 8.9% to $1.73 billion, while operating margin expanded to 26.2%.
MMM's revenue growth was driven by strength in industrial, safety, semiconductor and data center markets.
3M expects 2026 EPS of $9.10-$9.15, organic sales growth above 3.5% and an operating margin of 24.6%.
3M Company (MMM - Free Report) achieved a solid adjusted operating income of $1.73 billion in the third quarter of 2026, which increased 8.9% year over year. The company's adjusted operating margin reached 26.2%, reflecting an increase of 110 basis points (bps).
The company’s improved margin performance reflects the benefits of strong top-line growth, operational leverage and productivity gains. It’s worth noting that 3M reported revenues of $6.6 billion in third-quarter 2026, which increased 1% year over year. The revenues were driven by strength in general industrial, safety, semiconductor and data center end markets.
In July 2026, 3M partnered with Bain Capital to acquire Madison Fire & Rescue, forming a joint venture in which 3M contributed its Scott Safety business. Under the agreement, 3M received $700 million in cash and retained a 50.1% stake, while Bain Capital secured the remaining 49.9%. The deal enhanced 3M’s safety portfolio. In the third quarter of 2026, the combined business achieved high-single-digit pro forma sales growth, with margins surpassing initial expectations.
For 2026, 3M expects adjusted organic sales growth of more than 3.5% with adjusted earnings in the range of $9.10-$9.15 per share. The midpoint of the guided range is about $9.125, which reflects an increase from adjusted earnings of $8.20 per share reported in 2025. For the year, MMM expects an operating margin of approximately 24.6%.
Peer’s Margin Performance
GE Aerospace’s (GE - Free Report) cost of sales (comprising costs of equipment and services sold) increased 17.2% year over year to $9.1 billion in the third quarter of 2026. While selling, general and administrative expenses declined 6.8% to $1.1 billion, research and development expenses rose 10.4% to $458 million. In the quarter, GE Aerospace’s operating profit margin contracted 80 basis points to 19.9%.
Honeywell Technologies’ (HON - Free Report) total cost of sales (comprising the cost of products and services sold) decreased 5.7% year over year in third-quarter 2026. Its selling, general and administrative expenses were $1.04 billion, down 4.9% year over year. Honeywell Technologies’ operating income was $740 million, up 79.2% year over year. The operating income margin increased to 14.8% from 8.4% in the year-ago quarter.
The Zacks Rundown for MMM
Image Source: Zacks Investment Research
Shares of 3M have gained 3% in the past three months against the industry’s decline of 1.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, 3M is trading at a forward price-to-earnings ratio of 19.41X, above the industry average of 15.80X. MMM carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MMM’s earnings for 2026 and 2027 has increased 1.6% and 0.8%, respectively, in the past 60 days.
View the Zacks #1 Rank List
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Can 3M Sustain Operating Margin Momentum Amid Sales Growth?
Key Takeaways
3M Company (MMM - Free Report) achieved a solid adjusted operating income of $1.73 billion in the third quarter of 2026, which increased 8.9% year over year. The company's adjusted operating margin reached 26.2%, reflecting an increase of 110 basis points (bps).
The company’s improved margin performance reflects the benefits of strong top-line growth, operational leverage and productivity gains. It’s worth noting that 3M reported revenues of $6.6 billion in third-quarter 2026, which increased 1% year over year. The revenues were driven by strength in general industrial, safety, semiconductor and data center end markets.
In July 2026, 3M partnered with Bain Capital to acquire Madison Fire & Rescue, forming a joint venture in which 3M contributed its Scott Safety business. Under the agreement, 3M received $700 million in cash and retained a 50.1% stake, while Bain Capital secured the remaining 49.9%. The deal enhanced 3M’s safety portfolio. In the third quarter of 2026, the combined business achieved high-single-digit pro forma sales growth, with margins surpassing initial expectations.
For 2026, 3M expects adjusted organic sales growth of more than 3.5% with adjusted earnings in the range of $9.10-$9.15 per share. The midpoint of the guided range is about $9.125, which reflects an increase from adjusted earnings of $8.20 per share reported in 2025. For the year, MMM expects an operating margin of approximately 24.6%.
Peer’s Margin Performance
GE Aerospace’s (GE - Free Report) cost of sales (comprising costs of equipment and services sold) increased 17.2% year over year to $9.1 billion in the third quarter of 2026. While selling, general and administrative expenses declined 6.8% to $1.1 billion, research and development expenses rose 10.4% to $458 million. In the quarter, GE Aerospace’s operating profit margin contracted 80 basis points to 19.9%.
Honeywell Technologies’ (HON - Free Report) total cost of sales (comprising the cost of products and services sold) decreased 5.7% year over year in third-quarter 2026. Its selling, general and administrative expenses were $1.04 billion, down 4.9% year over year. Honeywell Technologies’ operating income was $740 million, up 79.2% year over year. The operating income margin increased to 14.8% from 8.4% in the year-ago quarter.
The Zacks Rundown for MMM
Image Source: Zacks Investment Research
Shares of 3M have gained 3% in the past three months against the industry’s decline of 1.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, 3M is trading at a forward price-to-earnings ratio of 19.41X, above the industry average of 15.80X. MMM carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MMM’s earnings for 2026 and 2027 has increased 1.6% and 0.8%, respectively, in the past 60 days.
MMM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.