3M (MMM) Earnings Might Surprise Despite Unfavorable Impacts of the Health Care spin-off

3M is expected to show a fall in quarterly revenue with a 26.5% decrease in revenue to $5.878 billion from $7.99 billion as compared to same quarter a year ago.

The consensus earnings per share (EPS) forecast is $1.68.

We need to note that in the quarter reporting, in April 2024, 3M completed the spin-off of its Health Care business into a separate public company. Notably, the spin-off is likely to have weighed on MMM’s year-over-year top-line comparison in the quarter.

Though it is expected to see a fall in 3M’s quarterly revenue due to the unfavorable impacts of the Health Care spin-off, 3M’s second-quarter performance is likely to have benefited from strength across its end markets, increase in channel inventory, solid operational execution and spending discipline.

Based on 10 Wall Street analysts offering 12 month price targets for 3M in the last 3 months. The average price target is $112.80 with a high forecast of $140.00 and a low forecast of $87.00. The average price target represents a 9.25% change from the last price of $103.25.

Though we might see a decline in the quarterly revenue in the upcoming report, there is still strong strength in the stock price because of 3M’s impressive operation execution and spending discipline.

These factors should bring investors confidence back and I am expecting some positive movement on 3M.

If we looked at 3M for the longer term, this might be a good time to buy if you are a dividend investors, because with the current market condition, 3M with a 5% dividend and also a more than 15% year-to-date return on its stock price, this stock sound like a reasonable BUY.

I would think the rotation would benefit 3M sector as it operates through the following segments: Safety and Industrial, Transportation and Electronics, Health Care, Consumer, and Corporate and Unallocated.

Health Care sector on the S&P 500 has managed to gain +0.81%.

MACD and KDJ is showing same sentiment that market is expecting MMM to report a decline in its quarterly revenue, but I see that as a buying opportunity as 3M could surprise in its earnings with its execution and also spending cost control.

So I will be watching how 3M would be trading on 25 July before its quarterly earnings before market open on 26 July. There might be an opportunity to be captured.

I would think that 3M would still be able to benefit from the Health Care sector growth despite the unfavorable impacts of the Health Care spin-off in April 2024.

I would think that we could monitor the price action on 3M to find some opportunities especially now that there is sell signal appearing for the mega cap and tech stocks.

Appreciate if you could share your thoughts in the comment section whether you think 3M earnings would surprise with the strength of health care sector growth.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.