3M stock price forecast and technical analysis: buy, sell, hold?

on Jun 11, 2024
  • 3M shares have surged by over 47% from the lowest point this year.
  • The company has been in an expensive turnaround strategy.
  • Technicals point to more upside in the coming months.

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3M (NYSE: MMM) stock price has rebounded sharply this year even as the company continued facing substantial challenges. It has soared to over $100 and is hovering at its highest point since August 2022. The stock has jumped by more than 47% from its lowest level in December last year.

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Turnaround continues

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3M, one of the biggest industrial companies in the United States, has done well this year as the turnaround continues.

This has been one of the most expensive turnaround approaches in corporate America. It has agreed to pay $10.3 billion to settle its forever chemicals settlement. These funds will be paid in about 13 years. 

The company has also agreed to pay $6 billion between 2023 and 2029 to settle claims of combat arms earplugs. $16 billion is a lot of money for a company valued at over $55 billion. Most importantly, it ended its long run as a dividend aristocrat by resetting its dividend to 40% of adjusted free cash flow.

As part of the turnaround, the company decided to spin out its healthcare business into a separate publicly traded company called Solventum. Solventum creates numerous products like wound care, surgical products, sterilization, and other dental products among others. It has a market cap of almost $10 billion.

The remaining company now focuses on the safety & industrial, transportation & electronics, and consumer products. It expects that its safety & industrial business will be flat this year while the transport & electronics business will rise slightly. 

Analysts have a mild opinion about the company. The average estimate for the company is about $107, a few points above the current $100. Similarly, data by TipRanks shows that the average estimate is $109. A DCF valuation metric estimates that the fair value for the stock is $169.5, which is higher than the current $100.

3M dcf

3M DCF calculation

3M stock price forecast (weekly)

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3M stock

The weekly chart shows that the 3M share price has been in a strong bullish trend in the past few months. It has jumped above the 23.6% Fibonacci Retracement level, which is a positive sign.

The Relative Strength Index (RSI) and the MACD indicators have pointed upwards, which is a positive sign in the market. Further, the stock has formed an inverse head and shoulders pattern, which is a positive sign.

Therefore, the outlook for the stock is still bullish, with the next point to watch being the 50% retracement point at $118. This view is about 18% above the current level. 

MMM stock analysis 

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3M stock price

3M chart by TradingView

The daily chart also shows that the 3M share price has been in a strong bull run in the past few months. It has also formed the inverse H&S chart pattern. Also, it formed a golden cross pattern, where the 200-day and 50-day moving averages make a bullish crossover. 

The stock has also moved to the fifth wave of the Elliot Wave pattern, which is a popular bullish sign. Therefore, the stock will likely continue rising as buyers target the key resistance point at $106, its highest point this year. A move above that level will point to more upside as buyers target the key point at $120.

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