The 3M $MMM+1.0% board approved a $6 billion (133.9 billion CZK) settlement to resolve claims that its earplugs caused hearing loss among veterans. With this approval, the company shut down analyst estimates that were higher than the final settlement amount.
People connected to the matter told The Wall Street Journal that the settlement will be paid over multiple years. Shares of 3M rose on Monday after the decision.
Hearing-damaging earplugs
3M produced earplugs that were supposed to protect against hearing-damaging noises, but that was not the case. The earbuds were issued by the U.S. Army, and 3M said the earbuds work properly if the individual using them is trained to use them properly. The 3M earplugs lawsuit has become the largest mass trespass in US history with the most complaints any company has ever had to face, reports The Wall Street Journal.
Analysis
Citi, with a "neutral" recommendation and $111 price target, said the potential settlement is smaller than some investors expected, according to Andrew Kaplowitz, an analyst at the firm.
RBC's Dean Dray, with an "underperform" recommendation and a $100 price target, said the results on the expression of any settlement are typically viewed as positive because they represent progress in resolving 3M's long-term process.
Barclays analysts were expecting a settlement of US$8 billion, they told Bloomberg.
3M shares
Shares of 3M (MMM) are up 0.44% to $104.12 in pre-market trading.
Do you hold these shares mainly for the steady dividend payment? For dividend companies, I would find other stocks.
Now the question is how much this will or will not affect future dividends. 🤔
This is really great news. More like this. We shopped the company for great prices and now we just have to wait.