- 3M (NYSE:MMM) fell nearly 4% yesterday and finished flat today after posting mixed Q2 results that included weaker than expected sales growth but improvements in earnings and margins, and Argus analysts argue the share weakness offers a buying opportunity.
- The firm says 3M is poised to deliver low to mid-single-digit organic sales growth, which along with margin expansion and a share buyback program, has the potential to drive high single-digit earnings growth.
- 3M should enjoy an earnings boost from improving global economic conditions and a stable-to-weaker dollar in 2016, as well as from new products generated through its focus on innovation, Argus says, while noting 3M generates ~65% of revenues from overseas, so it is likely to face near-term currency headwinds.
- RBC analysts are not so favorable, rating the stock Underperform as they were unsettled by what it saw as 3M's weaker outlook for organic sales growth, the $0.10 cut off the high end of EPS guidance, and Q2's 2% drop in China revenues.