What to expect from 3M’s Q2 2024 earnings report

3M Company (MMM), headquartered in Saint Paul, Minnesota, is a technology company that manufactures industrial, safety, and consumer products. Valued at $56.07 billion at market capitalization, the company’s product offerings include advanced materials, display materials and systems, housewares, home improvement, stationery, office supplies, personal safety, roofing granulates, closure and masking systems, and more. The industrial products and solutions giant is expected to report its fiscal second quarter 2024 financial results on Tuesday, July 23.

Ahead of the event, analysts expect MMM to post earnings of $1.66 per share on a diluted basis, down 23.5% from $2.17 per share in the year-ago quarter. The company has consistently topped Wall Street earnings per share estimates in its last four quarterly reports. In the first quarter, MMM posted net income and revenue of $928 million and $8 billion, respectively. Adjusted earnings per share came to $2.39, topping the consensus estimate of $2.08.

For fiscal 2024, analysts forecast MMM will post earnings per share of $7.17, down 22.4% from earnings per share of $9.24 in fiscal 2023.

MMM stock has underperformed the S&P 500 ($SPX)’s 25.2% gain over the past 52 weeks, while the stock is up 23.3% in that time frame. However, it has outperformed the S&P 500 Industrial Sector SPDR (XLI)’s 13.5% return over the same period.

On June 7, MMM shares closed up more than 2% after Bank of America analyst Andrew Obin upgraded the stock from Neutral to Buy and set a price target of $120 (previously $105).

MMM’s overall results can be attributed to the reduction of uncertainties that have plagued the company over the past several years, such as reaching a settlement with Public Water Suppliers over the production of PFAS chemicals and the $6 billion settlement in the Combat Arms earplug settlement, which will result in compensation for more than 249,000 veterans.

In addition, it spun off its healthcare business, Solventum, which will result in a cash payment of $7.7 billion to the company. It will also retain a 19.9% stake in Solventum, which can be liquidated within five years to raise cash. MMM also cut its dividend, which will allow the company to invest in its growth. The company expects full-year adjusted EPS of $6.80 to $7.30.

Analysts are unanimous in saying that MMM stock is Cautious, with an overall rating of “Hold.” Of the 12 analysts covering the stock, four recommend a “Strong Buy” rating, six have a “Hold” rating, and two give a “Strong Sell” rating. The average analyst price target for MMM is $110.85, indicating a 9.4% potential upside from current levels.

On the date of publication, Dipanjan Banchur did not hold (directly or indirectly) a position in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please refer to Barchart’s Disclosure Policy here.