MMM - Beyond The Rally: Lingering Challenges For 3M

2024-06-04 11:48:23 ET

Summary

• 3M has experienced a recent rally, providing relief to investors after years of poor performance.
• The spinoff of the healthcare division as Solventum has created opportunities for value crystallization, and more clarity on litigation costs was provided.
• However, the company still faces challenges with struggling businesses, cash flow pressure from litigation payments, and limited ability to invest.

Companies that are undergoing changes via corporate restructuring and spin-offs often present good opportunities for value crystallization. I think 3M ( MMM ) has experienced a similar dynamic with the recent rally, giving some relief to investors after three years of pain. More clarity on settlement costs has also helped give some visibility around big risk factors....

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