3M: Solventum Spin-Off To Strengthen Balance Sheet Amid Legal Settlements

Summary:

  • The Solventum spin-off will help 3M prepare for legal settlements related to defective earplugs and water supply damages.
  • 3M is risky due to potential future additional legal battles.
  • 3M is a slow grower expected to grow about 4% per year moving forward.
  • I rate 3M as a hold based on a 12.5% expected annual return over the next five years as supported by my DCF valuation.

3M tape manufacturing facility. This plant is part of the Industrial, Adhesives and Tape Division V

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Investment Thesis

The 3M Company (NYSE:MMM) has had a rough last couple of years that have been stained by legal battles that have resulted in large legal settlements such as a $6 billion lawsuit related to the sale of


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