🌟 Interesting opportunity at 3M!
3M $MMM has faced a number of challenges in recent years, most notably legal disputes and stagnant growth. Still, it offers interesting potential that is worth considering for value investors.
3M may be attractive to investors looking for a stable, long-term investment.
New CEO: William Brown, the former CEO of L3Harris, took the helm of 3M in May. His reputation for improving margins and efficiency brings hope for positive change.
Dividend cut as strategic move: 3M's dividend cut to 2,8 % freed up cash for growth investments and restructuring. 3M is expected to generate free cash flow (FCF) of $3.6 billion annually, which will cover the dividend while allowing for additional investment.
The spin-off of Solventum: The April spin-off of troubled Solventum brought the company $7.7 billion in cash, allowing it to focus more on key growth areas.
Ongoing restructuring: 3M is making sweeping changes, including cutting jobs and streamlining business processes. The goal is to increase adjusted operating margin from 18,7 % in 2023 to 20,7 % to 21,45 % in 2024.
Improving end markets: The Company expects revenue growth in two of its three segments in 2024. This growth is expected to continue in2025, particularly if interest rates are reduced.
Based on forecasts FCF of USD 3.6 billion the stock 3M are trading for approximately 15.6 times FCF in the year 2024. This valuation suggests interesting upside potential.
For investors looking for stable companies with the potential for long-term growth, I think 3M may be an interesting choice.
What is your opinion of 3M?
It's a great company. I made a mistake here. I bought, then sold right away due to problems and didn't wait long enough. I won't be buying now though.
It looked bad at first, but now I think the company is starting to thrive. I was buying well under $100 at the end of last year. I will continue to hold the company.