2024-01-28 08:30:00 ET
Summary
- 3M Company investors suffered a steep post-earnings selloff, falling over 16% from its January 2024 highs.
- The company has made progress in resolving its legal challenges but could still be liable for about $9 billion in remaining legal liabilities.
- Despite a less rosy forward outlook, the stock is undervalued and presents a potential mean-reversion opportunity for patient investors.
- I argue why the worst in MMM is likely over, as the recent selloff could be supported above the $90 level.
- With an attractive forward dividend yield of 6.4%, and more robust price action, don't overcomplicate 3M's recovery thesis from its multi-year lows.
In my pre-earnings update , I turned bullish on 3M Company ( MMM ), as I articulated that the worst is likely over. As a result, I anticipated that the market has priced in significant challenges over 3M Company's legal challenges at its October 2023 lows. That thesis worked out until MMM topped out in early January 2024. Accordingly, MMM investors seemed to have started to cut exposure three weeks before its fourth-quarter earnings release , as management provided forward guidance below analysts' estimates....
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For further details see:
3M: Don't Overcomplicate Its Turnaround Thesis