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3M (MMM) Gains But Lags Market: What You Should Know

3M (MMM) closed at $114.28 in the latest trading session, marking a +1.66% move from the prior day. This change lagged the S&P 500's 1.97% gain on the day. Elsewhere, the Dow gained 1.88%, while the tech-heavy Nasdaq added 0.24%.

Prior to today's trading, shares of the maker of Post-it notes, industrial coatings and ceramics had lost 9.97% over the past month. This has was narrower than the Conglomerates sector's loss of 10.93% and lagged the S&P 500's loss of 9.93% in that time.

3M will be looking to display strength as it nears its next earnings release. In that report, analysts expect 3M to post earnings of $2.66 per share. This would mark year-over-year growth of 8.57%. Meanwhile, our latest consensus estimate is calling for revenue of $8.76 billion, down 2.06% from the prior-year quarter.

MMM's full-year Zacks Consensus Estimates are calling for earnings of $10.40 per share and revenue of $35 billion. These results would represent year-over-year changes of +2.77% and -1.02%, respectively.

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It is also important to note the recent changes to analyst estimates for 3M. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. 3M is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, 3M is holding a Forward P/E ratio of 10.81. This valuation marks a discount compared to its industry's average Forward P/E of 14.29.

Also, we should mention that MMM has a PEG ratio of 1.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations was holding an average PEG ratio of 1.52 at yesterday's closing price.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 90, putting it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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