Why did 3M $MMM-0.9% stock appreciate significantly yesterday?
Unfortunately, there is no progress in the earplug lawsuit. The reason for the rise is that analysts at Bank of America upgraded their rating on the stock from Underperform to Neutral, citing a number of "near-term positives." Let's take a little look at their report.
3M
MMMIn a note to clients, the analysts highlighted the industry group's June settlement with a number of U.S. public water systems over allegations related to so-called "perpetual chemicals" that don't break down easily in the human body or the environment.
The more than $10 billion settlement was less than legal experts' expectations, analysts said. They added that "historically, litigation-risk stocks have performed well after initial settlement announcements."
Meanwhile, analysts said 3M's plans to cut staff to contain costs and offset falling demand for consumer electronics were "understated". The company's financial guidance for the second half of 2023 and fiscal year 2024 is "conservative", they said.
Growth is great, but we're still hovering around that $100 zone. One day we're above, one day we're below. We're waiting for something bigger here. But when it comes, the move will be worth it. Inflation won't have that big of an impact on this stock (think today's results), but earnings might.
It's funny that the share price didn't react that way earlier when the fine was lower than expected. But I understand when someone like Bank of America says it, it carries some weight. Now, let's get the plugs sorted out and maybe investors will finally see more growth.