NEOG - 3M: Near-Term Growth Looks Limited But A Fresh Start Is Welcome (Upgrade)
2024-07-18 15:51:45 ET
Summary
- 3M Company's second quarter results are expected to be lackluster compared to peers in the multi-industrial sector, with organic contraction of around 1% versus 2%-3% growth for the group.
- Auto electrification and electronics should be comparatively healthier businesses, but short-cycle manufacturing consumables could be weak; 2H '24 guidance will be important.
- 3M made a surprising move, naming Bill Brown as the new CEO; I like the prospects for meaningful transformation, but there's likely a lot of work ahead.
- Revenue growth of around 3% and high-teens FCF margins can support a fair value around $115 today, but transforming 3M back into a top-quartile multi-industrial could unlock a lot more.
It has been a rough road to get to this point, but 3M Company ( MMM ) investors actually have some reason to be optimistic about the future, and it’s been too long since that has been the case....
3M: Near-Term Growth Looks Limited, But A Fresh Start Is Welcome (Upgrade)