) hit a 52-week high of $135.81 during yesterday's trading
session, before dropping a penny to close the session at $135.80.
This reflects a solid year-to-date return of 46.5%. The average
trading volume for the last three months aggregated 3.1 million
Despite its strong price appreciation, this Zacks Rank #3 (Hold)
stock still has enough fundamentals that may further drive the
stock upward. The stock is currently trading at a forward P/E of
19.6x and has a long-term earnings growth expectation of 10.7%.
Impressive third-quarter 2013 results that comprised higher sales
across its businesses, top-line growth and new product launches
were the primary driving factors for 3M.
Going forward, 3M expects 9% to 11% growth in earnings per share,
4% to 6% organic revenue growth, 20% return on invested capital
and approximately 100% free cash flow conversion in the period
from 2013 -2017.
Despite a challenging macroeconomic environment, 3M expects
earnings in 2014 to be in the range of $7.30 to $7.55 per share
with organic local currency sales growth of 3% to 6%. The company
remains focused on inventing new products as it enjoys a
competitive advantage worldwide.
3M has also recently increased its quarterly dividend by 35% for
the first quarter of 2014. The company expects its 2013-2017
share repurchases to be in the range of $17 billion to $22
billion, up from its previous guidance of $7.5 billion to $15
billion. The company expects to further leverage its balance
sheet and aims to provide higher returns to shareholders.
Portfolio management, investment in innovation, and business
transformation are the three key levers on which the company
intends to focus moving forward. 3M will also continue to invest
in capital expenditures and research and development to support
organic growth as it aims a capital structure strategy and
increased capital deployment. 3M expects to invest between $5
billion and $10 billion on acquisitions through 2017.
Over the last 7 days, earnings estimates for 2013 and 2014 have
inched up by a penny each to $6.71 and $7.41, respectively. We
envision a further uptrend for the stock in the near future
backed by its strong growth potential.
Other Stocks to Consider
Other stocks that look promising and are worth a look now include
Hutchison Whampoa Limited
), each having a Zacks Rank #2 (Buy).
CLARCOR INC (CLC): Free Stock Analysis Report
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ITT CORP (ITT): Free Stock Analysis Report
3M CO (MMM): Free Stock Analysis Report
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