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On Wednesday, RBC Capital maintained its underperform rating on shares of 3M (NYSE:MMM) with a set share price target of $84.00. The decision follows a recent investor meeting held by the manufacturing conglomerate in New York City on March 19, where 3M’s management discussed its Solventum project within the Health Care sector.
During the meeting, the management team presented their strategy, highlighting the intention to invest in higher-growth markets and consider divestiture of lower-growth businesses. The focus was also on overcoming past underperformance issues.
Despite demonstrating a solid grasp of the business, the executives indicated that it might take approximately two to three years for Solventum to shift into an offensive position.
The company did not provide specific longer-term targets or dividend information at the event. With 3M’s considerable debt load, particularly in light of the spinoff which resulted in a net leverage ratio exceeding 3.5 times, the immediate priority for capital allocation was identified as debt reduction. This financial strategy underlines the company’s current focus on stabilizing its financial position.
RBC Capital’s reiteration of the underperform rating suggests that they believe 3M’s stock may not perform as well as the overall market in the near term. The $84.00 share price target reflects the firm’s assessment of the stock’s potential value based on their analysis.
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