Jefferies Trims Estimates, Raises PT, and Reiterates Buy on 3M (MMM)
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Price: $90.96 -0.1%
Rating Summary:
5 Buy, 19 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 13 | New: 18
Rating Summary:
5 Buy, 19 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 13 | New: 18
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Jefferies reiterated a Buy rating on 3M (NYSE: MMM) and raised their price target to $110.00 (from $108.00). They also trimmed estimates to reflect slightly weaker volumes.
"Given softer U.S. demand trends than we expected and headwinds in the EU and Asia (and to a lesser extent in Latin America), we are trimming our estimates slightly to reflect lower volume assumptions that should offset favorable tailwinds from real pricing and F/X," said analyst Laurence Alexander.
"Regionally, we expect volumes to be a touch weaker than 3M expected in the U.S. and Latin America, particularly in September, while softness in the EU and Asia is probably in line with plan," added Alexander.
He expects electronics & communications to disappoint, with some volume weakness in industrial & transportation and consumer & office as well.
"While broad leading indicators have formed "fish hooks"--i.e. less bad on a YoY basis--the momentum appears to be stalling heading into year-end, with 3-month rates of change starting to deteriorate again. To better reflect a prolonged period of slow, choppy growth trends, we have lowered our volume assumptions for 2013E by 2% (a $0.21-$0.25 headwind), which should be partly offset by a modest tailwind from F/X and a slightly more favorable raw material outlook due to the weaker global demand environment. We now forecast a 8% EPS CAGR through 2014E," added Alexander.
Jefferies expects 3M shares to outperform into the first half of next year as the market starts to discount a potential reacceleration in end-market demand in the second half of 2013 into 2014.
2012 estimates were lowered $0.05 to $6.40 and 2013 by $0.15 to $6.85.
For an analyst ratings summary and ratings history on 3M click here. For more ratings news on 3M click here.
Shares of 3M closed at $93.21 yesterday.
"Given softer U.S. demand trends than we expected and headwinds in the EU and Asia (and to a lesser extent in Latin America), we are trimming our estimates slightly to reflect lower volume assumptions that should offset favorable tailwinds from real pricing and F/X," said analyst Laurence Alexander.
"Regionally, we expect volumes to be a touch weaker than 3M expected in the U.S. and Latin America, particularly in September, while softness in the EU and Asia is probably in line with plan," added Alexander.
He expects electronics & communications to disappoint, with some volume weakness in industrial & transportation and consumer & office as well.
"While broad leading indicators have formed "fish hooks"--i.e. less bad on a YoY basis--the momentum appears to be stalling heading into year-end, with 3-month rates of change starting to deteriorate again. To better reflect a prolonged period of slow, choppy growth trends, we have lowered our volume assumptions for 2013E by 2% (a $0.21-$0.25 headwind), which should be partly offset by a modest tailwind from F/X and a slightly more favorable raw material outlook due to the weaker global demand environment. We now forecast a 8% EPS CAGR through 2014E," added Alexander.
Jefferies expects 3M shares to outperform into the first half of next year as the market starts to discount a potential reacceleration in end-market demand in the second half of 2013 into 2014.
2012 estimates were lowered $0.05 to $6.40 and 2013 by $0.15 to $6.85.
For an analyst ratings summary and ratings history on 3M click here. For more ratings news on 3M click here.
Shares of 3M closed at $93.21 yesterday.
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