Why This 3M Analyst Is Turning Bullish, Despite Company's Growing Liabilities

Shares of 3M Co MMM were trending higher in early trading on Thursday.

Although the company’s liabilities are likely to grow, the stock valuation already reflected this, according to Morgan Stanley.

The 3M Analyst: Joshua Pokrzywinski upgraded the rating for 3M from Underweight to Equal-Weight and raised the price target from $102 to $113.

The 3M Thesis: Given the PFAS settlement agreement in June and the Combat Arms settlement agreement this week, “we see the range of liability outcomes to be narrowing,” Pokrzywinski said in the upgrade note.

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The stock has underperformed over the past few years since PFAS grabbed the headlines in 2018 and the risk-reward now appears “more balanced,” the analyst wrote. “Improving fundamentals, achievable consensus margins, and sentiment with room to improve support a bull case,” he added.

There is an upside to the 2025 consensus estimates for 3M’s margins, Pokrzywinski further stated.

MMM Price Action: Shares of 3M had risen by 3.03% to $107.58 at the time of publication Thursday.

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