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3MMMM led the Dow Jones Industrial Average early Tuesday as the Post-It notes maker posted better-than-expected Q2 results and raised its full-year outlook. MMM stock cleared an early entry buy point.
The industrial conglomerate has been shedding noncore assets and leveraging AI to accelerate product launches. 3M said it's on track to launch more than 350 new products this year and 1,000 by the end of 2027. The company said last week that its new expanded beam optics technology for data centers is being deployed by Microsoft Azure.
3M Earnings
Results: Adjusted earnings per share grew 11% to $2.40, 15 cents ahead of forecasts. Operating profit rose 40 basis points from a year ago to 24.9%. Sales rose 5.6% to $6.5 billion, as comparable sales growth (excluding divestitures, acquisitions and currency adjustment) picked up to 5.4% from 1.2% in Q1.
Outlook: 3M now expects full-year EPS of $8.80 to $8.95, up from the prior range of $8.50 to $8.70. Organic sales growth is now seen above 3.5% vs. the prior outlook of around 3%.
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JPMorgan Upgrade
JPMorgan upgraded 3M to overweight from neutral on July 17, raising its price target to 180 from 178 ahead of earnings. Analyst Chigusa Katoku wrote that growth is "taking hold" at the company, according to The Fly investment news site.
That followed the July 15 news of 3M's data center win. The company says its optical technology "is more forgiving, more durable and dramatically faster to deploy" than traditional fiber connections that require highly precise alignment at the point of contact, often with carefully polished surfaces.
At a June 10 Wells Fargo investor conference, CEO William Brown said its enhanced beam optical technology sales were running around $100 million, but 3M thinks the market opportunity may be north of $2 billion.
3M Stock
3M jumped 6.9% to 170.10 before the open. With that move, 3M is set to break above the trend line sloping down from the June 25 high of 69.76. That's the buy point of its handle formation in a 23-week cup-with-handle base.
Aggressive investors could use the trendline break as an early entry.
3M was the top-performing Dow Jones stock early Tuesday, although CaterpillarCAT had a bigger point gain, so it was doing more to lift the 30-stock industrial average.
Dow Jones futures rose 0.25%, while the S&P 500 were up 0.4%.
Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
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