3M (MMM) -2.1% in Monday’s trading as Deutsche Bank downgraded shares to Hold from Buy with a $178 price target, trimmed from $199, noting a 64% gain since the bank raised the stock to Buy in July 2024, largely due to the company’s hiring of the well-respected industrial CEO Bill Brown to run the company.
Deutsche Bank analysts led by Nicole DeBlase praised Brown for his “very credible” 2025-27 financial plan and regular updates to the investment community that indicate encouraging and perhaps better than expected progress on the company’s (MMM) margin expansion, which has caused very little pushback to the bank’s bullish view on 3M’s margin opportunity.
“As a result, we now see only very low single-digit upside to consensus forecasts through 2028, and the stock’s valuation after adjusting for legacy liabilities has also closed the gap vs. MI/EE peers,” thus meriting the downgrade.
Even after increasing its top-line view to 3%%-4% organic growth through 2030 and continuing to assume 3M (MMM) reaches 30%-plus operating margins by 2030, consistent with best-in-class MI/EE levels, DeBlase and team still calculate only very low single-digit upside to current consensus forecasts through 2028.