3M Stock To $120?

3M (MMM) stock has jumped 13% during the past week, and is currently trading at $171.60. Our machine-driven multi-factor assessment suggests that it may be time to sell MMM stock. We have, overall, a pessimistic view of the stock, and a price of $120 may not be out of reach. We believe there are a few things to fear in MMM stock given its overall Moderate operating performance and financial condition. But keeping in mind its High valuation, we think that the stock is Unattractive.

Below is our assessment:

MMM stock has jumped meaningfully recently and we currently find it unattractive. This may feel like a caution, and there is significant risk in relying on a single stock. However, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Let’s get into details of each of the assessed factors but before that, for quick background: With $92 Bil in market cap, 3M offers industrial abrasives, ceramic transportation solutions, healthcare coding and food safety software, and consumer bandages, braces, supports, and respirators across multiple segments.

[1] Valuation Looks High

This table highlights how MMM is valued vs broader market. For more details see: MMM Valuation Ratios

[2] Growth Is Inconsistent

• 3M has seen its top line shrink at an average rate of -10.3% over the last 3 years
• Its revenues have grown 1.1% from $25 Bil to $25 Bil in the last 12 months
• Also, its quarterly revenues grew 3.5% to $6.5 Bil in the most recent quarter from $6.3 Bil a year ago.

This table highlights how MMM is growing vs broader market. For more details see: MMM Revenue Comparison

[3] Profitability Appears Moderate

• MMM last 12 month operating income was $5.1 Bil representing operating margin of 20.5%
• With cash flow margin of 10.2%, it generated nearly $2.5 Bil in operating cash flow over this period
• For the same period, MMM generated nearly $3.4 Bil in net income, suggesting net margin of about 13.7%

This table highlights how MMM profitability vs broader market. For more details see: MMM Operating Income Comparison

[4] Financial Stability Looks Very Strong

• MMM Debt was $13 Bil at the end of the most recent quarter, while its current Market Cap is $92 Bil. This implies Debt-to-Equity Ratio of 14.3%
• MMM Cash (including cash equivalents) makes up $5.2 Bil of $38 Bil in total Assets. This yields a Cash-to-Assets Ratio of 13.8%

[5] Downturn Resilience Is Weak

MMM has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• MMM stock fell 58.5% from a high of $172.47 on 4 June 2021 to $71.65 on 23 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $171.60 on 23 October 2025 $171.60

 
2020 Covid Pandemic

• MMM stock fell 35.0% from a high of $151.81 on 14 January 2020 to $98.66 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 January 2021

 
2008 Global Financial Crisis

• MMM stock fell 56.4% from a high of $80.23 on 5 October 2007 to $35.01 on 6 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 26 April 2011

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.