3M Might Be A Value Trap: Litigation Costs May Kill Free Cash Flow Growth


  • 3M’s substantial litigation costs will negatively impact free cash flow, making it a potential value trap.
  • Growth has been nonexistent in recent years and no clear catalysts for growth are visible.
  • 3M may be overvalued, but is considered a hold by the author.

3M World Headquarters


Investment Thesis

3M Company’s (NYSE:MMM) financial growth has deteriorated in recent years and free cash flow generation is at risk due to $18.5 billion in legal settlements damages. I don’t see any reason to believe that the company can

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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