3M is tangled in a web of legal problems besides facing the inflation and economic slowdown that everyone else is. On Friday, though, Wall Street-backed off its harsh stance —just a bit: One bearish analyst is now a little less bearish.
UBS analyst Chris Snyder upgraded his rating of 3M (ticker: MMM) stock to Hold from Sell and raised his price target to $126 a share from $118. He believes the stock price is down enough where potential outcomes from litigation are accounted for.
3M is facing hundreds of thousands of lawsuits related to its sale of faulty earplugs to the military. The gear has been tied to hearing problems in veterans. In addition, the company is on the hook for cleaning up chemicals that leaked into the ground water where they were produced.
Wall Street has struggled to quantifying the liabilities. Analysts estimate the number in the tens of billions of dollars. Comparatively speaking, 3M’s market capitalization sits at about $68 billion. The liabilities are in large part why the stock for about 11 times estimated next year’s earnings, down from about 16 times three years ago. The Buy-rating ratio isn’t impacted by the upgrade. Of 21 analysts covering the company, one rates shares Buy—a little less than 5%. The average Buy-rating ratio for stocks in the S&P 5000 is 58%.
Snyder’s move, however, did change the Sell-rating ratio. Now, six of 21 analysts rate shares Sell—almost 30%. The average Sell-rating ratio for S&P stocks is less than 10%. Also on Friday, Deutsche Bank analyst Nicole Deblase lowered her price target to $127 from $155. She rates shares Hold.
The average analyst price target now sits at about $138 a share. In trading, upgrade was outweighing the target cut. 3M shares were up 0.8%, at $120.18. The S&P 500 was up 0.8% as well, and the Dow Jones Industrial Average was up 0.6%. The stock is down about 33% this year.
https://www.marketwatch.com/articles/3m-ear-plugs-lawsuits-upgrade-51662732513?mod=newsviewer_click
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