NEW YORK (TheStreet) --3M (MMM) - Get 3M Company Report shares are increasing 1.4% to $139.50 in pre-market trading after analysts at Credit Suisse upgraded the company to "outperform" from "neutral" this morning.
The firm dropped its price target to $155 from $160.
"We think the risk/reward is attractive after the stock's pullback, particularly when considered against other 'defensive' EE/MI peers," analysts said.
Despite the upgrade, analysts lowered their price target on 3M based on a weaker growth forecast.
However, analysts are bullish long-term as they believe the company has the change of growing earnings per share at a double-digit pace next year, according to the firm's note.
Separately, TheStreet Ratings team rates 3M CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate 3M CO (MMM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, MMM has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Industrial Conglomerates industry and the overall market, 3M CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for 3M CO is rather high; currently it is at 54.28%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.91% significantly outperformed against the industry average.
- 3M CO has improved earnings per share by 5.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, 3M CO increased its bottom line by earning $7.49 versus $6.72 in the prior year. This year, the market expects an improvement in earnings ($7.78 versus $7.49).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Industrial Conglomerates industry average. The net income increased by 2.6% when compared to the same quarter one year prior, going from $1,267.00 million to $1,300.00 million.
- You can view the full analysis from the report here: MMM