Last Update 05 Feb 26

Fair value Increased 1.76%

MMM: Turnaround Prospects Will Be Tested By PFAS Litigation And Mixed Street Expectations

The analyst price target on 3M has been revised slightly higher to about $177 from $174, as analysts adjust their models for small changes in fair value, discount rate, revenue growth, profit margin, and future P/E assumptions following a mix of recent target increases and cuts across major firms.

Analyst Commentary

Recent Street research on 3M has been mixed, with several firms adjusting their price targets in both directions and one major downgrade. Taken together, these moves highlight different expectations around the company’s execution, earnings power, and the valuation investors might be willing to pay.

Bullish Takeaways

Bullish analysts who raised their price targets by US$2 to US$5 appear to see enough support in their models to justify slightly higher fair value estimates, even after updating assumptions on margins and P/E.
These higher targets suggest confidence that 3M can deliver on operational execution, such as cost control or mix improvement, that supports current earnings forecasts in their models.
Some bulls seem comfortable assigning a modestly higher P/E, indicating they see 3M as fairly positioned within its peer group based on their current growth and profitability assumptions.
The clustering of upward revisions around similar target levels points to a view that, within a reasonable range, the stock is aligned with analysts’ updated fair value work.

Bearish Takeaways

Bearish analysts who lowered price targets by US$6 to US$8 appear more cautious on how much multiple investors might be willing to pay, trimming fair value estimates in their updated models.
The cuts suggest concerns that execution risks, such as future profitability or the consistency of earnings delivery, could limit upside relative to previous expectations.
These lower targets, alongside the price target raises, show a wide spread of views on valuation, which can reflect uncertainty around longer term growth and margin assumptions in the models.
The recent downgrade at JPMorgan highlights that at least one large firm is more cautious on the overall risk and reward balance for 3M, even as others revise targets higher.

What's in the News

3M completed a share repurchase program announced on February 4, 2025, buying back a total of 19,245,002 shares, or 3.59% of shares, for US$2,864.07m, including 3,407,011 shares, or 0.64%, for US$549.28m between October 1, 2025 and December 31, 2025 (company buyback update).
The Board declared a first quarter 2026 dividend of US$0.78 per share on common stock, payable March 12, 2026, to shareholders of record as of February 13, 2026 (dividend announcement).
A federal judge in Montana denied motions to dismiss a class action related to PFAS in firefighter turnout gear, allowing claims against 3M and other manufacturers, including RICO claims, to proceed while a related Ninth Circuit ruling is pending (lawsuit and legal ruling).
3M introduced Ask 3M, an AI powered digital assistant for engineers, and expanded its Digital Materials Hub to support virtual materials sampling and collaboration with 3M scientists, using Amazon Web Services AI tools (product and technology announcement).
At CES 2026, 3M is showcasing materials and AI powered tools for consumer electronics, automotive, advanced manufacturing, and data centers, and is participating in a panel on virtual materials and simulation with Audi and Synopsys (CES 2026 product and industry event announcement).

Valuation Changes

The consensus analyst price target has risen slightly, with fair value moving from US$174.25 to about US$177.32.
The discount rate has edged higher from 7.67% to about 7.71%, reflecting a modestly higher required return in the updated model.
Revenue growth has eased slightly, with the forward assumption moving from about 2.50% to about 2.24%.
The net profit margin has risen slightly, with the assumption moving from about 19.24% to about 19.34%.
The future P/E has ticked higher, moving from about 21.01x to about 21.22x in the revised valuation work.

Focus on innovation, operational efficiency, and strategic investment in growth areas positions 3M for expanded margins and sustained long-term revenue growth.
Effective risk management, disciplined pricing, and proactive legal resolution underpin financial stability and enhance investor confidence.
Extensive litigation, macroeconomic headwinds, rising regulatory pressure, and operational inefficiencies threaten profitability and growth prospects amid persistent market and environmental challenges.

Catalysts

About 3M

Provides diversified technology services in the Americas, the Asia Pacific, Europe, the Middle East, Africa, and internationally.What are the underlying business or industry changes driving this perspective?

The acceleration in new product launches (up 70% YoY; targeting 215 for the year) and a 9% rise in five-year innovation sales-expected to surpass 15% growth for the year-positions 3M to capitalize on rising global needs for health, safety, digitalization, and sustainably-driven products, likely supporting both future revenue growth and margin expansion.
Significant operational efficiency gains, such as improved on-time delivery, increased equipment effectiveness, quality cost reductions, and supply chain/process consolidation, are driving structurally higher operating margins and earnings-benefits expected to compound as further optimization and automation are rolled out company-wide.
Increased rigor in commercial excellence and disciplined pricing-especially within industrial and safety segments-alongside expanding cross-selling initiatives, is strengthening pricing power and customer retention, mitigating inflation, tariff, and competitive pressures while stabilizing/rebuilding net margins.
Strategic portfolio focus, with more resources being allocated to growth areas like R&D (notably in advanced materials, healthcare tech, and eco-friendly filtration), is aligning the company with the expanding demand in industries benefitting from connected devices, environmental regulation, and clean technologies-all supporting long-term top-line growth.
Ongoing successful management of legal liabilities (e.g., PFAS settlements with multi-decade payment schedules and active risk mitigation), together with robust free cash flow and opportunistic share buybacks, provides balance sheet flexibility and supports investor confidence in future earnings stability and value creation.

3M Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming 3M's revenue will grow by 2.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 16.0% today to 18.1% in 3 years time.
Analysts expect earnings to reach $4.7 billion (and earnings per share of $8.99) by about September 2028, up from $3.9 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.2x on those 2028 earnings, up from 20.7x today. This future PE is greater than the current PE for the US Industrials industry at 7.0x.
Analysts expect the number of shares outstanding to decline by 2.19% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.7%, as per the Simply Wall St company report.

3M Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing and unresolved PFAS ("forever chemicals") litigation remains a significant overhang, with more than 30 state attorney general cases and personal injury suits still pending-these could result in large, unpredictable cash outflows and prolonged pressure on net margins and earnings.
Exposure to persistent macroeconomic sluggishness in key markets such as Europe and North America-especially in automotive and consumer electronics-risks structural stagnation in organic sales growth, limiting top-line revenue expansion.
Heightened global tariff volatility and de-globalization pressures could increase input costs and supply chain complexity for 3M, compressing net margins despite recent productivity gains and cost controls.
The company's ongoing legacy portfolio complexity, coupled with the slow pace of operational improvement (e.g., lagging on-time-in-full delivery and inventory inefficiencies), may restrict further reductions in SG&A and hinder sustained earnings growth.
Intensifying regulatory scrutiny and ESG expectations regarding environmental legacy liabilities, including property and resource damage from PFAS, could result in additional compliance costs, product restrictions, or reputational harm, all negatively impacting future revenues and profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $161.625 for 3M based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $187.0, and the most bearish reporting a price target of just $101.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $26.1 billion, earnings will come to $4.7 billion, and it would be trading on a PE ratio of 21.2x, assuming you use a discount rate of 7.7%.
Given the current share price of $153.08, the analyst price target of $161.62 is 5.3% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Divided on 3M as Fair Value Rises Amid New Initiatives and Persistent Risks