MMM - 3M Not Getting Its Due In A Growth-Obsessed Market

• 3M posted strong results in what has been a strong quarter for multi-industrials, including solid organic revenue growth and core operating leverage despite cost inflation.
• Cost headwinds are a real concern now, and 3M's weak pricing leverage in the second quarter raises questions about whether they can offset these pressures with pricing.
• Litigation (PFAS and earplugs) remains a clear headline and financial risk, and may limit management's flexibility on greater near-term portfolio restructuring.
• 3M is a value name in a growth world, and not very popular given its perceived reliance on short-cycle recoveries; low-to-mid single-digit growth can drive a worthwhile return for more contrarian investors.

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