3M stock leads Dow Jones higher after earnings demonstrate renewed profitability
- 3M reports Q4 earnings that impress Wall Street.
- MMM shares rise more than 5% on earnings beat.
- Adjusted EPS of $1.68 beats consensus by 14 cents.
- CEO Brown says he will transition toward new products.
3M (MMM) stock leads the Dow Jones Industrial Average (DJIA) in its first trading session during the second Trump administration. As President Donald Trump issued a number of executive orders and threatened tariffs against the US’ two largest trading partners — Canada and Mexico — 3M posted pre-market results from the fourth quarter on Tuesday morning.
The multifaceted industrial concern led with adjusted earnings per share (EPS) of $1.68, which was $0.14 better than Wall Street had expected. By focusing on results in the year ahead, 3M also distracted from the consensus miss on adjusted revenue, which came in $50 million below expectations at $5.8 billion. Sales of $6.01 billion, however, outperformed expectations of $5.85 billion.
3M stock zoomed 5.5% higher above $148.50, while the DJIA gained 1%. The NASDAQ advanced 0.3%, and the S&P 500 added 0.6%.
3M stock earnings news
CEO William Brown said that he was going to tilt 3M, the maker of common brand names like Scotch tape and Post-It Notes, toward new products. As such, the company expects organic growth between 2% and 3% in 2025.
“Our fourth quarter capped a year of strong results as we returned to positive organic revenue growth in the full year,” Brown said in the company’s press release. “We are carrying this momentum forward and are confident in our ability to deliver our 2025 guidance.”
Brown guided adjusted EPS in the range of $7.60 to $7.90, which was not too different from the prior consensus. The company also sees adjusted operating cash flow of between $5.2 and $5.3 billion.
Sales rose meagerly by just 1% to 2% annually in most segments in Q4, but CEO Brown said he would focus the company’s investments on more rapidly growing product lines for electric vehicles, data centers and semiconductors.
The fourth quarter is typically a cyclical low for 3M, so the market expects the pace to pick over the next three quarters reported in 2025.
3M stock forecast
3M stock broke out of its long-term downtrend back in August before consolidating by riding the descending trendline somewhat lower. Now that earnings is behind it, the current rally will have shareholders and some traders salivating at the thought of regaining 2021's $162 to $174 resistance channel.
MMM tends to move up slowly, so expect some sideways action on the way up. The Relative Strength Index (RSI) on the weekly chart below has reached 72, which doesn't mean that MMM shares will require a pullback. Just no that the gains will be more measured from here until further material improvements from the company.
3M weekly stock chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
