Is 3M Company Stock Underperforming the Nasdaq?

Saint Paul, Minnesota-based 3M Company (MMM) provides diversified technology services, conducting operations in electronics, telecommunications, industrial, consumer and office, health care, safety, and other markets. Valued at $79.7 billion by market cap, the company businesses share technologies, manufacturing operations, marketing channels, and other resources. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and MMM perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the conglomerates industry. 3M's century-long reputation for innovation and reliability, backed by a diverse product portfolio and strong patents and trademarks, has secured its leading position in global markets. 

Despite its notable strength, 3M slipped 14.5% from its 52-week high of $177.41, achieved on Feb. 12. Over the past three months, MMM stock declined 4.3%, underperforming the Nasdaq Composite’s ($NASX) 19.3% gains during the same time frame.

Shares of MMM fell 5.3% on a YTD basis but climbed 2.4% over the past 52 weeks, underperforming NASX’s YTD gains of 15.5% and 38.4% returns over the same time frame.

To confirm the bearish trend, MMM has been trading below its 200-day moving average since early March. However, the stock is trading above its 50-day moving average since mid-May. 

MMM lagged due to weak organic growth, though margins improved on cost controls and productivity. 3M launched 84 new products in Q1, up 35% year over year, cut cost of poor quality by 100 bps, and grew backlogs across industrial and data centers. 

In the competitive arena of conglomerates, Honeywell International Inc (HON) has taken the lead over 3M, showing resilience with a 14.4% uptick on a YTD basis and 4.4% gains over the past 52 weeks.

Wall Street analysts are reasonably bullish on MMM’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it, and the mean price target of $175.33 suggests a potential upside of 15.6% from current price levels.