Key Points:
- 3M shares rose a monstrous 23.0% in one day, following strong earnings results, with a 7.3% revenue beat and a 14.9% adjusted EPS beat.
- This was the first quarter that 3M’s recently spun-off healthcare business, Solventum, operated independently.
- Management raised its full-year profit forecast from $6.80-$7.30 per share to $7.00-$7.30 per share.
View 3M’s full Q2 earnings results >>>
3M’s Earnings Results:
3M Company’s shares hit a 52-week high after reporting strong quarterly results:
3M reported adjusted revenue of $6.26 billion, beating analysts’ estimates of $5.83 billion by 7.3%. The company also reported adjusted EPS of $1.93 per share, beating analysts’ estimates of $1.68 by 14.9%.
Good news kept coming, with management raising its full-year EPS forecast to $7.00-$7.30 per share, up from $6.80-$7.30 per share.
New CEO Bill Brown says his main goals are to boost sales and “reinvigorate 3M’s innovation.” He noted that 3M’s products are aging and investment in new product development had decreased in past years as the company had moved research spending to exit the “forever chemicals” manufacturing.
3M is now focusing on high-growth areas such as automotive electrification and climate tech and moving away from lower-margin consumer products to boost its growth in a lower-demand macro environment.
What were 3M’s earnings results by segment?
In July 2022, 3M announced that it would spin off its healthcare business. On April 1st, 3M completed the spin-off of Solventum (SOLV).
This is Solventum’s first quarter operating independently, so there is no healthcare segment this quarter for 3M.
3M’s Safety and Industrial, Transportation and Electronics, and Consumer segments all saw revenues decline 1.0% year over year for the quarter:
View 3M’s full segment earnings results >>>
How is 3M expected to do next quarter?
Will 3M be able to light up its sales growth?
Investors are eager to see what kinds of sales growth 3M can drive with its new focus on innovation.
3M’s consensus estimates for the next quarter are based on coverage from 11 Wall Street sell-side analysts, which gives these estimates a strong trustworthiness rating:
Q3 Expected Results:
- Expected Revenue: $6.1B – down (27.1%) from Q3 2023
- Expected Operating Margins: 22.5% – up 10 basis points from Q3 2023
- Expected Normalized EPS: $1.91 – down (28.6%) from Q3 2023
- Expected Free Cash Flow: $1.15B – down (23.5%) from Q3 2023
View 3M’s full Q3 earnings estimates >>>
Is 3M a good stock to buy?
Do analysts expect 3M to drive growth in its business in the next few years?
We’ve aggregated Wall Street’s 5-year sell-side estimates for 3M, which can help give investors insight into the business’s performance.
It’s important to take analysts’ estimates with a grain of salt because forecasting a company’s future performance accurately is challenging for anyone, even investment professionals.
Investment analysts get company forecasts wrong, just like professional meteorologists still get the weather forecast wrong.
Here are 3M’s consensus analyst estimates for the next 5 years:
Notable 4-Year Estimates: (FY 2024-2028 to adjust for the recent spinoff)
- Expected Revenue CAGR: 4.4%
- Expected Operating Income CAGR: 7.0%
- Expected Normalized Net Income CAGR: 6.7%
- Expected Free Cash Flow CAGR: 7.1%
See 3M’s full Analyst Estimates >>>
The farther out you forecast a company’s results, the more uncertainty there is, so we also like to look at a company’s near-term estimates.
Notable 2025 Estimates: (expected growth from 2024)
- Expected Revenue Growth: 2.5%
- Expected Operating Income Growth: 8.9%
- Expected Normalized Net Income Growth: 7.6%
- Expected Free Cash Flow Growth: (2.4%)
Final Thoughts:
3M’s share price saw a massive increase based on a big revenue and earnings beat.
Management expects good results to continue, with a big increase in the full-year EPS forecast.
Want to dive further into 3M?
TIKR’s Terminal was built for investors who think like business owners.
Additionally, there’s a whole world of promising companies.
And some have better fundamentals than 3M.
The TIKR Terminal offers industry-leading investment research on over 100,000 global stocks.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!
