Barclays Maintains an 'Equalweight' on 3M (MMM); Thoughts on Investor Day
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Price: $91.48 +0.57%
Rating Summary:
5 Buy, 19 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
5 Buy, 19 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Barclays maintains an 'Equalweight' on 3M (NYSE: MMM) price target raised $1 to $95.
Barclays analyst says, "3M investor day today was good, but not great, with its usual (and impressive) focus on new products but little else to move us off the sidelines. The bull case on 3M shares is the potential for above-historic, above-peer core organic growth in the range of 7-10% and incremental margins of 25-35%, translating into EPS growth of 13-20%. Over the past 6 years, average core revenue growth has been 3-4% and average annual EPS growth 6-7% vs a peer group materially higher. Optical films has been the main headwind and is expected to continue to be so in 2012. Though 2012 guidance today was a bit higher than we thought, it still implies below peer growth - but of course that depends on macro."
"...Even at 3M's targeted long-term EPS growth rate of 10-12%, we'd have a tough time arguing for substantial P/E multiple expansion from here. It's too cyclical of a company to command a big S&P 500 premium without a higher growth rate. High-end peers like Danaher (NYSE: DHR), Emerson (NYSE: EMR), Honeywell (NYSE: HON) all acknowledge this challenge. 3M will need to address this as well, in our opinion."
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 $82.13 yesterday.
Barclays analyst says, "3M investor day today was good, but not great, with its usual (and impressive) focus on new products but little else to move us off the sidelines. The bull case on 3M shares is the potential for above-historic, above-peer core organic growth in the range of 7-10% and incremental margins of 25-35%, translating into EPS growth of 13-20%. Over the past 6 years, average core revenue growth has been 3-4% and average annual EPS growth 6-7% vs a peer group materially higher. Optical films has been the main headwind and is expected to continue to be so in 2012. Though 2012 guidance today was a bit higher than we thought, it still implies below peer growth - but of course that depends on macro."
"...Even at 3M's targeted long-term EPS growth rate of 10-12%, we'd have a tough time arguing for substantial P/E multiple expansion from here. It's too cyclical of a company to command a big S&P 500 premium without a higher growth rate. High-end peers like Danaher (NYSE: DHR), Emerson (NYSE: EMR), Honeywell (NYSE: HON) all acknowledge this challenge. 3M will need to address this as well, in our opinion."
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 $82.13 yesterday.
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