JPMorgan upgrades 3M, Emerson Electric to Overweight ahead of earnings

Investing.com -- JPMorgan upgraded shares of 3M and Emerson Electric to Overweight from Neutral ahead of upcoming quarterly earnings, citing improving growth prospects, supportive end-market trends and expectations for stronger earnings momentum into 2027.

For 3M, the brokerage raised its December 2026 price target to $180 from $178, saying the company is entering a phase where revenue growth should increasingly support earnings expansion. JPMorgan expects second-quarter organic growth to exceed 3%, driven by strength in data centers, semiconductors and industrial markets, offsetting continued weakness in consumer electronics and automotive. It also expects pricing power, productivity gains, portfolio optimization and lower PFAS-related costs to support margins through 2027.

JPMorgan forecasts second-quarter adjusted EPS of $2.26, slightly above Wall Street estimates, with organic growth of 3.2% and operating margins of 24.6%. The bank believes strong order trends, a growing backlog and improving demand across all three business segments position 3M for accelerating growth in the second half of 2026.

For Emerson Electric, JPMorgan raised its rating to Overweight while maintaining a $157 price target, arguing that concerns over the pace of second-half growth overlook the company's sizable backlog and improving process industry cycle. The brokerage expects long-cycle projects, including power, LNG, semiconductor and aerospace investments, to support revenue growth, while Middle East rehabilitation work could provide additional upside not included in company guidance.

The bank said Emerson's backlog increased 9% year over year, providing visibility into a sharp acceleration in organic growth during the second half of fiscal 2026. It also expects improving capital spending, resilient pricing and easing tariff pressures to drive margin expansion into 2027, despite continued softness in Europe and China's chemicals market.

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