Consider This Before Taking a Position in 3M Company (MMM)

Now trading at a price of $106.22, 3M Company moved 0.8% Friday

3M Company returned losses of -27.2% last year, with its stock price reaching a high of $154.66 and a low of $100.16. Over the same period, the stock underperformed the S&P 500 index by -28.0%. As of April 2023, the company's 50-day average price was $105.41. 3M Company provides diversified technology services in the United States and internationally. Based in Saint Paul, MN, the large-cap Industrials company has 92,000 full time employees. 3M Company has not offered a dividend during the last year.

Overview of the Company's Finances:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $32,136 $32,184 $35,355 $34,229
Gross Margins 46.7% 48.4% 46.8% 43.8%
Operating Margins 18.9% 21.0% 20.8% 11.9%
Net Margins 14.22% 16.73% 16.75% 16.88%
Net Income (MM) 4,570 5,384 5,921 5,777
Net Income(MM) $4,570 $5,384 $5,921 $5,777
Interest Cost -$368,000 -$500,000 -$462,000 -$395,000
Depreciation & Amort. -$1,593,000 -$1,911,000 -$1,915,000 -$1,831,000
Earnings Per Share $7.81 $9.36 $10.12 $9.68
EPS Growth n/a 19.85% 8.12% -4.35%
Diluted Shares (MM) 585 582 585 552
Free Cash Flow (MM) $5,371 $6,612 $5,851 $3,842
FCF Growth n/a 23.11% -11.51% -34.34%
Net Current Assets (MM) -$21,562 -$19,431 -$16,552 -$16,997
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 2.38 1.58 1.36 1.46

A Very Low P/E Ratio but Trades Above Its Graham Number:

3M Company has a trailing twelve month P/E ratio of 10.9, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of $9.55, the company has a forward P/E ratio of 11.0. The 4.1% compound average growth rate of 3M Company's historical and projected earnings per share yields a PEG ratio of 2.65. This suggests that these shares are overvalued. The market is placing a fair value on 3M Company's equity, since its P/B ratio of 3.96 is comparable to its sector average of 3.78. The company's shares are currently trading 42.3% above their Graham number.

There's an Analyst Consensus of Some Upside Potential for 3M Company:

The 17 analysts following 3M Company have set target prices ranging from $95.0 to $210.0 per share, for an average of $117.16 with a hold rating. As of April 2023, the company is trading -10.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.

3M Company has an average amount of shares sold short because 2.4% of the company's shares are sold short. Institutions own 68.4% of the company's shares, and the insider ownership rate stands at 0.12%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 8% stake in the company is worth $4,978,760,786.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.