How To Trade 3M Stock Ahead of Its Upcoming Earnings?

3M (NYSE: MMM) is scheduled to announce its earnings on Friday, July 18, 2025, before market open. This report is a significant event for traders, particularly those who leverage event-driven strategies.

Over the last five years, 3M’s stock has demonstrated a balanced reaction to earnings announcements, with an equal split of positive and negative one-day returns following the results. In 50% of instances, the stock saw a positive one-day return, with a median of 4.8%. Conversely, in the other 50% of instances, it experienced a negative one-day return with a median of -2.8%. This historical pattern suggests a notable degree of volatility and a lack of consistent upward or downward bias post-earnings.

For the upcoming second quarter of 2025, consensus estimates anticipate earnings of $2.01 per share on sales of $6.05 billion. These projections represent a 4.2% increase in earnings per share compared to the year-ago quarter’s $1.93 per share, although sales are expected to be lower than the prior year’s $6.25 billion.

While the actual financial results and their comparison to consensus and expectations will heavily influence the stock’s immediate reaction, understanding these historical patterns can provide valuable insights for event-driven traders. There are two primary approaches to consider:

• Pre-Earnings Positioning: Based on the historical odds, a trader might choose to take a position before the earnings release, anticipating a move (either positive or negative) and managing the associated risk given the 50/50 split in past performance.
• Post-Earnings Positioning: Alternatively, a trader could wait for the earnings release, analyze the immediate market reaction and the correlation between short-term and medium-term returns, and then position themselves accordingly after the announcement.

From a fundamental perspective, 3M currently holds a market capitalization of approximately $85 billion. Over the last twelve months, the company generated $25 billion in revenue. It demonstrated operational profitability with $4.9 billion in operating profits and a net income of $4.4 billion.

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3M’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 10 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 50% of the time.
• Notably, this percentage increases to 67% if we consider data for the last 3 years instead of 5.
• Median of the 10 positive returns = 4.8%, and median of the 10 negative returns = -2.8%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

MMM 1D, 5D, and 21D Post Earnings Return

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

MMM Correlation Between 1D, 5D and 21D Historical Returns

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