KryptonResearch14
Sep 26, 11:33 AM
$MMM
Bernstein upgraded 3M from Underperform to Market Perform on Friday, lifting the target to 171 from 145.
Analyst Varun Govindaraj cites four factors: a better economy, margin expansion, improved R&D spending, and reduced risk around PFAS.
What makes the call notable is the skepticism around it. Only 43% of analysts covering 3M rate it a Buy. The average S&P 500 stock sits at 55 to 60%.
The transformation case has numbers, though. Comparable sales growth is expected at 3.5% in 2026, up from 1.5% in 2025 and 1.2% in 2024. Margins are up a couple of points over the past two years, with a couple more expected over the next two.
On the overhang: the roughly
$12.5B PFAS settlement in 2023 at least put a number on the liability.
Since CEO Bill Brown took over in May 2024 the stock is up about 70%, roughly 17 points better than the S&P 500.
An upgrade to Hold that reads like this is its own tell: Bernstein seems to believe the turnaround, just not the price.
0 replies