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Morningstar’s Analysis

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Strong Quarter From Wide-Moat 3M Nice to See but Doesn’t Materially Change Our View

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

Wide-moat rated 3M had a very solid 2020 fourth quarter, with nearly of all its business divisions pacing slightly ahead of our near-term top-line expectations. This dynamic also made its way down to 3M’s segment operating profit line. 3M produced fourth-quarter revenue of $8.6 billion (against our expectations of $8.2 billion) and segment operating income of $2.1 billion (against our $2.0 billion expectations). Despite near-term outperformance, 3M’s 2021 guide is somewhat muted, in our view, though these effects largely canceled themselves out in our projections. However, we are raising our fair value estimate by $1 to $187 from $186 previously to account for time value of money, even as our long-term expectations remain relatively unchanged.

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Company Profile

Business Description

3M is a multinational conglomerate that has operated since 1902 when it was known as Minnesota Mining and Manufacturing. The company is well-known for its research and development laboratory, and the firm leverages its science and technology across multiple product categories. As of 2020, 3M is organized into four business segments: safety and industrial, transportation and electronics, healthcare, and consumer. Nearly 50% of the company’s revenue comes from outside the Americas, with the safety and industrial segment constituting a plurality of the firm’s net sales. Many of the company’s 60,000-plus products touch and concern a variety of consumers and end markets.

3M Center
St. Paul, MN, 55144
T +1 651 733-1110
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 95,000