3M Co (NYSE: MMM)
MMM Earnings & Technicals
Before the market opened on Tuesday, 3M Co. (MMM) issued lower guidance again for the current year and 2016 blaming the slow-growth global economy. Original earnings per share guidance for FY15 was in the $7.60-7.65 range but has been lowered now to $7.55 with organic growth in the 1% range as compared to prior guidance at 1.5-2%. For fiscal year 2016 they are now expecting earnings per share in the $8.10-8.45 range. As downbeat as this sounds MMM has been making changes over the past few years to help improve growth and according to Zack’s Research,
“In order to fuel its growth engine, 3M has initiated some prudent steps to strengthen and focus on its core portfolio of businesses. Since 2012, the company has pruned its businesses from 40 to 26, thereby improving customer relevance, productivity and speed through a leaner operating structure. At the same time, 3M has maintained a steady investment in R&D to develop innovative products. The company expects to invest $1.8 billion in R&D in 2016 for higher organic growth and complement it through strategic acquisitions.” Zacks Research
Investors did not much care for this as shares sunk in the premarket session over 3% and slowly traded lower throughout much of the day before closing at $148.13, down just over 6% from yesterdays close of $157.63. Shares are now down on the year 10% with still plenty of downside potential. I see some support coming in at $148.00 and $146 levels with further support down in the $140 range. Resistance will be met at $150, $153.02 and then at the 200 day moving average currently sitting at $154.93. Share prices have ranged from a high of $170.50 to lows of $134.00 throughout 2015. Shares are now trading well below major moving averages and looks like it has the potential for another move down. We could see a relief bounce as shorts cover but with all the resistance above it could provide another opportunity to get short with better risk/reward potential. Currently, analysts have an average price target of $161.93.
About 3M Co
3M Co. is a diversified technology company serving customers and communities with innovative products and services. The company operates its business through five segments: Industrial, Safety and Graphics, Electronics and Energy, Health Care and Consumer. The Industrial segment serves a broad range of markets, such as automotive original equipment manufacturer and automotive aftermarket, electronics, appliance, paper and printing, packaging, food and beverage, and construction. The Safety and Graphics segment serves a broad range of markets that increase the safety, security and productivity of people, facilities and systems. The Electronics and Energy segment serves customers in electronics and energy markets, including solutions for dependable, cost-effective, high-performance electronic devices, telecommunications networks, electrical products, power generation and distribution, and infrastructure protection. The Health Care segment serves markets that include medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, health information systems, and food manufacturing and testing. The Consumer segment serves markets that include consumer retail, office retail, home improvement, building maintenance and other markets. 3M was founded by Henry S. Bryan, Hermon W. Cable, John Dwan, William A. McGonagle and J. Danley Budd in 1902 and is headquartered in St. Paul, MN. MarketWatch
