VALUATION HIGHLIGHTS

1. Safety & Industrial constitutes 50% of the Trefis price estimate for 3M's stock.
2. Transport & Electronics constitute 29% of the Trefis price estimate for 3M's stock.
3. Consumer constitutes 21% of the Trefis price estimate for 3M's stock.

WHAT HAS CHANGED?

Latest Earnings: Q4 and Full Year 2025

3M reported Q4 2025 adjusted sales of $5.91 billion, a 0.8% increase organically, with adjusted EPS of $1.64. For the full year 2025, the company delivered total adjusted sales of $23.7 billion. Results were driven by strong operational execution and spending discipline under new leadership, which helped offset volume softness in consumer retail and industrial end markets. The company completed the spinoff of its healthcare business, Solventum, significantly altering its consolidated financial profile compared to the prior year.

Note: 3M's FY'25 ended on December 31, 2025.

Legal Settlement Finalization and Strategic Reshaping

3M has reached critical milestones in resolving its legacy legal liabilities, including the Combat Arms Earplugs and PFAS public water system settlements. With the Solventum spinoff complete, management has shifted focus toward its "New 3M" strategy, which prioritizes high-growth secular trends such as automotive electrification, climate technology, and next-generation industrial automation. This pivot involves a more rigorous portfolio management approach, exiting lower-margin product lines to improve overall corporate vitality and cash flow predictability.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of 3M's value that present opportunities for upside or downside to the current Trefis price estimate:

Safety and Industrial

• Operating Margin Expansion: Through the implementation of a simplified global operating model, 3M aims to drive sustainable margin improvement. If the company achieves its target of 200-300 basis points of expansion in this segment through 2026, there is significant upside to our current valuation.


• Industrial Production Recovery: As a major supplier of abrasives, adhesives, and personal safety equipment, 3M is highly sensitive to the Global Purchasing Managers Index (PMI). A faster-than-expected rebound in manufacturing activity in the U.S. and China would provide volume leverage that currently sits at the lower end of Trefis estimates.

For additional details, select a division from the interactive Trefis split for 3M at the top of the page.

BUSINESS SUMMARY

3M is a global diversified technology company that creates differentiated products across industrial, safety, and consumer markets. Following its healthcare spinoff, the company leverages a centralized research and development engine to apply 51 core technology platforms-ranging from adhesives to film science-to solve complex customer problems in over 70 countries.

SOURCES OF VALUE

The Safety and Industrial segment remains 3M's most significant value driver due to its deep integration into global manufacturing supply chains.

Material Science Innovation Engine

3M's competitive advantage lies in its ability to combine multiple technology platforms into unique solutions. For example, its multi-layer optical film technology is used in everything from smartphone displays to solar panels. This cross-pollination of R&D allows the company to maintain high barriers to entry and command premium pricing for specialized industrial components.

Global Brand Equity and Distribution

The 3M and Scotch brands represent a massive moat in both industrial and consumer channels. The company's vast distribution network allows it to scale new products rapidly across different geographies, ensuring that 3M remains a primary partner for wholesalers and retailers globally. This scale provides a significant unit-cost advantage over smaller, specialized competitors.

KEY TRENDS

Automotive Electrification and Thermal Management

As the automotive industry transitions to electric vehicles (EVs), 3M is pivoting its portfolio to provide thermal management materials, battery assembly adhesives, and lightweighting solutions. This trend represents a higher content-per-vehicle opportunity compared to traditional internal combustion engines, positioning 3M as a key player in the green energy transition.

PFAS Manufacturing Exit

3M is on track to exit the manufacturing of all per- and polyfluoroalkyl substances (PFAS) by the end of 2025. While this move removes a significant source of revenue, it is a strategic necessity to mitigate future environmental liability and align with global regulatory shifts. The company is currently transitioning customers to PFAS-free alternatives developed through its internal R&D labs.

Supply Chain Regionalization

The global shift toward "near-shoring" and "friend-shoring" is reshaping industrial demand. 3M is realigning its manufacturing footprint to be closer to its end customers, reducing logistics costs and lead times. This strategic shift is designed to improve supply chain resilience and allow for faster response times to localized market trends.