The current quarter is looking higher than expected at 3M (NYSE: MMM). The revised guidance has investors feeling good with regard to the corporate, sending shares up 5% on Thursday.
Earnings tick up on spin-off related benefits
It has been a rough time for 3M shareholders. The stock has lost nearly half of its value over the past five years on account of concerns about litigation against the company, sluggish markets, and talk of corporate bloat.
But 3M hopes to get a fresh start in 2024. The company recently named a modern CEO and is inside the strategy of spinning out its healthcare division.
On Friday, outgoing CEO Michael Roman told a Wall Street investor conference that revenue for the current quarter is coming in “on target” with the $7.6 billion guidance, and earnings usually tend to be barely ahead of expectations. Roman raised the company’s guidance to $2.05 to $2.20 per share, from $2 to $2.15 per share.
The added $0.05 was attributed to a debt raise achieved by the healthcare spin-off, which is to be named Solventum.
Is 3M a buy?
The raised guidance is nice, nevertheless it will possibly be higher if it was based on improving operations and never a one-time event. 3M is slowly starting to construct momentum around its turnaround, but investor patience will probably be required.
The litigation that has haunted this company for years won’t go away overnight, and latest CEO William Brown goes to wish time to put his stamp on the company. Investors have reason to hope that the long drift downward is finally over, nevertheless it goes to take loads of work to push the stock back to its previous highs.
Must you invest $1,000 in 3M straight away?
Before you buy stock in 3M, consider this:
The Motley Idiot Stock Advisor analyst team just identified what they imagine are the 10 best stocks for investors to buy now… and 3M wasn’t one among them. The ten stocks that made the cut could produce monster returns within the approaching years.
Stock Advisor provides investors with an easy-to-follow blueprint for achievement, including guidance on constructing a portfolio, regular updates from analysts, and two latest stock picks every month. The Stock Advisor service has greater than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 11, 2024
Lou Whiteman has no position in any of the stocks mentioned. The Motley Idiot recommends 3M. The Motley Idiot has a disclosure policy.
Why 3M Stock Was Up Today was originally published by The Motley Idiot