3M Faces Lawsuit and Upgrade as Stock Rises Under New CEO
3M Company ($MMM) has seen a mix of legal challenges and positive analyst upgrades in recent months. A New York fire district filed a lawsuit in June, alleging that turnout gear manufacturers, including 3M, knew for decades that their gear contained toxic PFAS 'forever chemicals.' The case is currently in the complaint stage with no immediate claims.
On the financial front, 3M's $6 billion earplug settlement entered its second year of payments on October 1, disbursing approximately $5,378 per point to enrolled claimants. Registration for the settlement is now closed.
Analyst firm Bernstein upgraded 3M's stock from 'Underperform' to 'Market Perform,' raising the price target from $145 to $171. Analyst Varun Govindaraj cited factors like a better economy, margin expansion, improved R&D spending, and reduced risk around PFAS. Notably, only 43% of analysts covering 3M rate it a 'Buy,' compared to the S&P 500 average of 55-60%. The upgrade comes amid expectations of comparable sales growth increasing from 1.2% in 2024 to 3.5% in 2026, with margins improving over the past two years and expected to continue rising.
Since CEO Bill Brown took over in May 2024, 3M's stock has surged about 70%, outperforming the S&P 500 by roughly 17 points. Meanwhile, 3M CEO highlighted strong point-of-sale growth through distributors continuing into Q3, supporting expected sales acceleration in the second half of the year.