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3M's Recent Setbacks Represent a Buying Opportunity

Macroeconomic headwinds have weighed on the wide-moat firm's shares, but world-class R&D, economies of scale, and other advantages point to a bright future.


Barbara Noverini: 3M (MMM) suffered some setbacks this quarter as the firm struggled to grow the top line amidst currency headwinds and sluggish economic environments in several of its key geographic markets, such as Western Europe, Latin America, and China. Nevertheless, we believe that the long-term prospects for this wide-moat firm remain bright, and we believe that shares represent a better entry point now than they did even a quarter ago.

At the heart of 3M is an R&D organization that we believe is world class, supporting the creation of strong patents and very strong well-known brands, such as Scotch Tape, Filtrete, and Post-it Notes. These are all intangible assets that we believe serve as the foundation of 3M's wide economic moat.

Barbara Noverini does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.