MMM’s Structural Improvements May Extend Growth Curve

Analysts at Jefferies & Co reiterate their "buy" rating on 3M MMM. The target price for MMM is set to $110. According to Jefferies & Co, 3M's business leaders argued for a nuanced and disciplined approach to developing "Tier B and C" products, where 3M can grow economic profits (and EBIT) without sacrificing free cash flow or ROIC…. 3M is shifting from focusing on 4-5 "big hit" projects to drive growth to investing in serial innovation across a wide range of platforms.” “Multiple cultural shifts underway: 1) encourage customer-focused innovation cycles and supply-chain efficiency without sacrificing manufacturing expertise; 2) strengthen marketing; 3) deepen the portfolio to gain share; 4) reduce "leakage" when products go off-patent; 5) shift to local R&D centers; and 6) use the pyramid strategy to encourage experimentation with business models,” according to the analysts. Jefferies adds, “We expect M&A to play a noticeable part in strengthening the company's competitive positions serving the health care, construction, infrastructure, water, oil & gas, mining and renewable energy markets.” More Analyst Ratings here