3M Posts Better-Than-Expected Q3 Results, Updates Guidance

3M (MMM) delivered upbeat third-quarter results characterized by broad-based organic growth and strong margins and cash flow. Revenue and earnings came in above consensus estimates as the company benefited from strong end-market demand for its products. MMM shares fell 0.13% to close at $182.16 on October 27.

3M is a U.S. company that develops, manufactures, and sells various industrial, safety, and consumer products worldwide. It also deals in electronics and medical and surgical supplies.

Sales in the quarter were up 7.1% year-over-year to $8.9 billion, topping consensus estimates of $8.67 billion. The increase came as 3M navigated supply chain disruptions and maintained a relentless focus on serving customers. (See Top Smart Score Stocks on TipRanks)

Operating income in the quarter totaled $1.8 billion, and EPS was flat year-over-year at $2.45, but above consensus estimates of $2.20. Operating cash flow came in at $1.9 billion and adjusted free cash flow totaled $1.5 billion. Focus now shifts to investing in high-demand areas while improving operational performance and driving productivity.

During the quarter 3M returned $1.4 billion to shareholders, with $527 million in stock buybacks and $856 million in dividends.

3M also updated its full-year 2021 sales and earnings guidance. The company is projecting sales growth of between 9% and 10% compared to previous guidance of 7% to 10%. Earnings per share are expected to range between $9.70 and $9.90 compared to previous guidance of between $9.70 and $10.10.

Recently, Langenberg & Co. analyst Brian Langenberg upgraded the stock to a Buy from a Hold.

Consensus among analysts is a Hold based on 2 Buys, 6 Holds, and 4 Sells. The average 3M price target of $197.09 implies 8.20% upside potential to current levels.

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