The 3M (NYSE: MMM) stock rating from Barclays has been all over the place. A Barclays analyst decreased the firm's price objective to $107 a few weeks after lifting it to $126 from $111.
However, they still maintained an overweight rating on the company. With the new objective in mind, the stock should rise by about 15% from its current price in the next 12 months.
This price objective is comparable to an analyst's revised projection from Bank of America, who had previously set a lower aim of $100 down from $110. Nevertheless, BofA did not provide a rating. The stock's underperform rating and revised target price of $78 reflect RBC Capital's more gloomy outlook.
An eventful period for 3M This news arrives during a hectic news period. In addition to receiving final clearance for a $12.5 billion settlement for its production and usage of PFAS chemicals, 3M's healthcare division Solventum is now a publicly listed stock.
With payments of $2.9 billion and $1.8 billion scheduled for 2024 and 2025, respectively, the settlement has a net present value of $10.5 billion. We have already established that management may feel pressured to reduce dividend payments in light of these cash calls, which coincide with a period of lower cash flow creation.
While 3M is on the mend, other businesses in its industry might see even more robust growth, according to Barclays' analysts. As for 3M, BofA sees low valuation and improved execution as positives, but there are lingering legal threats.
Why and how it affects investors Think about buying 3M shares because of its attractive dividend. 3M might not be the best purchase for those looking to increase their income if they anticipate a dividend cut. In order to reorganize, 3M may need to reduce dividends rather than use money from the Solventum spinoff or sell its healthcare firm holding.
An analyst at RBC Capital has forecasted a dividend decrease of as much as 70%. That prospective development won't sit well with the market. However, after everything has settled down, it may serve to stabilize the stock price and provide management with the financial leeway to reorganize the company in a way that promotes growth.
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