Proactive Investors - 3M Co (NYSE:MMM) shares traded higher on Friday after the stock was upgraded by Bank of America (NYSE:BAC) analysts to a ‘Buy’ rating from ‘Neutral.’
The analysts awarded the diversified manufacturer a boosted price objective of $120, up from $105.
Shares of 3M traded 1.9% higher at about $100 late morning on Friday.
Prompting BofA’s upgrades are signals from 3M that new CEO William Brown is refocusing the company on reaccelerating growth and operations.
They noted that while Brown is yet to outline his plans for the company to investors, 3M has publicly posted a video message to employees in which the new CEO stated that innovation driven by organic growth and operating efficiency are his top two priorities.
“The video demonstrates that Brown has spent his first days at 3M's manufacturing and R&D facilities, the two areas of the company which historically have been at the heart of 3M's culture,” they wrote.
“Our sense is that over the past several years per- and polyfluoroalkyl substances (PFAS) has been a major distraction impacting the company's operations and product development.”
The bank’s analysts see the change of management coming at an “opportune time” for 3M, which has been dealing for the past few years with litigation exiting PFAS or “forever chemical” manufacturing and spinning out its healthcare arm.
“With major litigation settlements behind it and uncertainty about remaining lawsuits reduced, investors are likely to focus on improving operations, potential cyclical leverage, and inexpensive valuation even when adjusted for future legal liabilities,” they wrote.
“Given the schedule of the litigation it is unlikely that we will see incremental headlines related to PFAS litigation until mid-2025 which is another positive.”