3M Company (MMM) — Fairly Valued With Tenuous Growth Prospects
3M Company shares moved -32.3% over the last 52 weeks, with a high of $154.66 and a low of $100.16. During this time, the stock lagged the S&P 500 index by -25.0%. As of April 2023, the company's 50-day average price is $108.49. 3M Company provides diversified technology services in the United States and internationally. The large-cap Industrials company has 92,000 full time employees and is based in Saint Paul, MN. 3M Company has returned a 5.8% dividend yield over the last 12 months.
Overview of the Company's Finances:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue | $32,136,000 | $32,184,000 | $35,355,000 | $34,229,000 |
| Gross Margins | 46.7% | 48.4% | 46.8% | 43.8% |
| Operating Margins | 19.1% | 21.2% | 21.7% | 12.7% |
| Net Income | $4,570,000 | $5,384,000 | $5,921,000 | $5,777,000 |
| Net Margins | 14.22% | 16.73% | 16.75% | 16.88% |
| Earnings Per Share | $7.81 | $9.25 | $10.12 | $10.18 |
| Diluted Shares | 585,100 | 582,200 | 585,300 | 551,469 |
| Free Cash Flow | $5,371,000 | $6,612,000 | $5,851,000 | $3,842,000 |
| Capital Expenditures | -$1,699,000 | -$1,501,000 | -$1,603,000 | -$1,749,000 |
| Net Current Assets | -$21,562,000 | -$19,431,000 | -$16,552,000 | -$16,997,000 |
| Current Ratio | 1.41 | 1.89 | 1.7 | 1.54 |
| Long Term Debt | $17,518,000 | $17,989,000 | $16,056,000 | $14,001,000 |
| Net Debt / EBITDA | 2.3 | 1.62 | 1.33 | 1.97 |
3M Company Is Currently Fairly Valued:
Compared to the Industrials sector's average of 20.49, 3M Company has a trailing twelve month P/E ratio of 10.7 and, according to its EPS guidance of 9.5, an expected P/E ratio of 11.4. 3M Company's PEG ratio is 2.12 based on its 5.0% compound average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued. The market is giving 3M Company a fair value in terms of its book value, since its P/B ratio of 3.8 is lower than the sector average, which stands at 3.78. As of the date of publication, the company's shares are trading 35.3% above their Graham number of $75.05.
Analysts Give 3M Company an Average Rating of Hold:
17 analysts are following 3M Company and have set target prices ranging from $100.0 to $210.0 per share. On average, they have given the company a rating of hold. At the current price of $101.56, MMM is trading -15.1% away from its average analyst target price of $119.63 per share, implying an analyst consensus of some upside potential for the stock. The company has an average amount of shares sold short since 2.5% of the company's shares are tied to short positions. Institutions own 68.4% of 3M Company's shares, while the insider ownership rate stands at 0.12%. which is a small amount of insider investors. The company's biggest shareholder is the Vanguard Group, Inc. with a 8% stake in the company worth $4,760,336,353.
