- 3M shares are outperforming all 29 other Dow stocks so far this year.
- 3M shares fell in value by about two-thirds between the beginning of 2018 and the end of 2023.
- Analysts have upgraded 3M’s rating now that the lawsuits have been settled.
- The weekly chart shows a bullish break above the five-year resistance trend line.
After years of underperformance, 3M (MMM) is now the best performing stock in the Dow Jones Industrial Average (DJIA) so far this year. By settling a series of high-profile lawsuits, cutting its dividend for the first time in more than half a century and demonstrating improved profitability in its July quarterly results, 3M stock now appears to be in a technical uptrend for the first time since 2018.
The 47% rise in 3M shares this year has led the DJIA to a 10.3% gain so far, although the index’s higher weightings for Goldman Sachs (GS) and American Express (AXP) have played a disproportionate role. Despite the general market turbulence in early August, the DJIA hit an all-time high last week.
3M Stock News
3M has performed so well in 2024 due to its recovery from a historic multi-year sell-off. 3M stock fell from all-time highs above $217 in early 2018 to a decade-low of $71.35 in October 2023.
A huge weight has been lifted off the shoulders of 3M shareholders this year as management was finally able to reach a settlement with plaintiffs over combating defective earplugs and PFAS chemicals in drinking water, the latter often referred to as “forever chemicals.”
After 65 years of increasing its dividend, 3M management cut its quarterly payout from $1.25 to $0.70 per share earlier this year to fund its settlements. In June, the company agreed to pay more than $10 billion over a 13-year period to settle lawsuits with U.S. municipal water utilities over PFAS cleanup.
The recent rally was helped by a consensus 15% beat in second-quarter earnings per share in late July, along with a $426 million upside surprise in revenue.
Analysts quickly jumped in with upgrades to MMM. Deutsche Bank raised its outlook to Buy and increased its price target from $100 to $150. The bank’s analysts said they were confident in new CEO Bill Brown’s growth strategy.
“We expect growth to continue into 2025 as the company benefits from cost reductions, and we are raising our preliminary adjusted earnings per share estimate to $7.65 from $7.50,” Argus analyst John Eade wrote at the time.
In mid-August, BMO Capital Markets added 3M to its list of high-quality stocks with abundant cash on the balance sheet, an above-average return on equity and low volatility in earnings growth.
3M Stock Forecast
Not many observers have noticed that 3M stock has now clearly broken through a significant five-year resistance point. Since the all-time high in January 2018, this trend line has been moving down furiously. But August saw the first break above that trend line, which should give traders confidence that the current rally will continue.
3M is likely to hit at least $150 this year. Many analysts see this region, where there is previous support, as a near-term price target. However, the $170 price level also looks like a good bet. That’s where a brief rally met resistance on the way down in the summer of 2021.
MMM weekly stock chart
The daily chart below gives us an idea of support points. The market sell-off on August 5th stopped just below $120, and the 50-day simple moving average (SMA) is sliding above $115.50. This year’s rapid rally will need a period of consolidation before higher support levels become apparent.
MMM daily stock chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
