3M Tops Earnings Estimates, Full-Year 2022 Outlook Deferred to Feb
3M shares rose nearly 1% in pre-market trading on Tuesday after the maker of N95 masks reported better-than-expected earnings and revenue in the fourth quarter, largely driven by demand for its personal safety and home improvement products.
The Minnesota-based company said its sales for the fourth quarter ended Dec. 31 came in at $8.6 billion, up 0.3% year-on-year; organic local-currency sales increased 1.3% year-on-year. That beat the market expectations of $8.55 billion.
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The company’s net income declined to $1.34 billion, or $2.31 per share during the quarter, down from $1.41 billion, or $2.41 per share, a year earlier. But that was above the Wall Street consensus estimates of $2.07 per share.
The maker of N95 masks said it will host a virtual strategic update and 2022 outlook meeting on Monday, Feb. 14, 2022.
3M stock rose nearly 1% higher at $174.28 on Tuesday. The stock slumped nearly 3% so far this year after surging nearly 2% in 2021.
Analyst Comments
“The lack of guidance will be the focal point today, but 4Q itself appeared to demonstrate a few things: 1) Management appears to be getting on top of price/cost, which we expect to see across many price/cost impacted names in 2021 as pricing ramped through year-end. 2) While revenues were in-line with our estimate (cons was too high on intracompany mask adjustments in corporate), they were below consensus and included positive commentary on December suggesting underlying trends were modest otherwise. We’re less willing to extrapolate a trend off December given the potential for abnormal positive seasonality due to fewer December shutdowns than usual (according to FAST, which is hardly a global proxy but one of few data points thus far). 3) The margin beat appears to include slightly lower than expected restructuring spend in 4Q at ~$15M vs. $25-$50M guide. 4) The significant auto outperformance vs. builds in 3Q appeared to normalize in 4Q.s,” noted Joshua Pokrzywinski, equity analyst at Morgan Stanley.
3M Stock Price Forecast
Eleven analysts who offered stock ratings for 3M in the last three months forecast the average price in 12 months of $181.36 with a high forecast of $200.00 and a low forecast of $155.00.
The average price target represents a 4.63% change from the last price of $173.33. From those 11 analysts, none rated “Buy”, eight rated “Hold” while three rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $185 with a high of $226 under a bull scenario and $152 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the company’s stock.
Several other analysts have also updated their stock outlook. RBC cut the target price to $155 from $166. JPMorgan lowered the target price to $200 from $205. Deutsche Bank raised the target price to $192 from $182. UBS lifted the target price to $168 from $167.
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