MMM - Embedded Expectations Analysis - 2020 08 03
3M Company (MMM) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.8x Uniform P/E. At these levels, the market is expecting profitability to remain flat, and management may be concerned about costs, production, and demandSpecifically, management may lack confidence in their ability to continue reducing their costs, meet their original outlook, and sustain the production of N96 respirators. Furthermore, management may have concerns about their elective procedural medical solutions' performance, the sustainability of industrial and consumer demand in China, and their margin performance, particularly in their Safety and Industrial segment. Finally, they may be overstating their expectations for a market recovery in the second half of the year, and they may lack confidence in their ability to execute their 2020 capital allocation and recovery plans leading out of the economic slowdown
3M is a technology company. The company has four segments: Safety and Industrial, which consists of personal safety, industrial adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules; Transportation and Electronics, which consists of electronics, automotive and aerospace, commercial solutions, advanced materials, and transportation safety; Health Care, which includes medical solutions, oral care, separation and purification sciences, health information systems, drug delivery systems, and food safety; and Consumer, which consists of home improvement, stationery and office supplies, home care, and consumer health care.
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