UPDATE: Argus Upgrades 3M (MMM) to Buy
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Argus analyst John Eade upgraded 3M (NYSE: MMM) from Hold to Buy, PT $200.
The analyst comments "In our experience, when the stock price of a well-managed, financially strong company under Argus fundamental coverage falls to the point that the dividend yield is above 3.3%, the stock offers value for long-term investors. The current yield on EMR is 3.3%. We think the company is back on track to achieve its long-term goals of raising margins and growing earnings. Over time, we expect it to generate high single-digit EPS growth, driven by 3%-4% revenue growth, margin improvement, and share buybacks. The company's balance sheet is solid. Indeed, 3M has one of the market's longest dividend growth streaks, with 62 consecutive years of rising dividends. On valuation, the shares are down almost 30% from their all-time highs and multiples are relatively low. Our target price of $200 implies a P/E ratio of 20-times next year's earnings, near the midpoint of the historical range."
Shares of 3M closed at $175.02 yesterday.
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