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3M Shows Promise with Novel Products & Strategic Deals

On Oct 5, Zacks Investment Research updated the research report on diversified conglomerate 3M CompanyMMM .

Portfolio management, investment in innovation and business transformation are the three key levers on which 3M intends to focus to gain a competitive advantage in the industry. 3M also intends to continue investing in capital expenditures and research and development to support organic growth as it aims at a prudent capital structure strategy and increased capital deployment. 3M's global footprint, diversified product portfolio and the ability to penetrate into different markets have been its forte.

At the same time, 3M continues to deliver sustainable increase in sales, earnings and free cash flow, benefiting from its long-term strategy of accelerating investment in high-growth programs. The company's ability to convert high R&D spends into up-cycle market share gains and strong pricing powers determine its success. Organic growth remains the first priority of the company as it continues to invest in infrastructure and commercialization capability. In addition, 3M aims to leverage on strategic acquisition opportunities that can strengthen its portfolio.

3M recently added three new products to its safety gloves line-up, thus expanding its offerings to electricians, contractors and other industry professionals. These include the 3M Gripping Material High Dexterity Work Gloves, the 3M Comfort Grip Winter Gloves and the 3M Comfort Grip Gloves. The products will enable greater versatility, better protection and superior convenience for a wide range of applications and environments.

In order to seek newer growth avenues, 3M has been making efforts to reposition its portfolio by divesting assets that no longer fit its corporate strategy and indulge in investments which are more in tune with it. In August this year, the company completed the acquisition of Polypore International Inc.'s Separations Media business for $1 billion. Polypore's Separations Media business provides microporous membranes and modules for filtration in the life sciences, industrial and specialty segments. This acquisition has expanded 3M's existing core filtration platform in several high-growth segments and strengthened its position in technology, manufacturing and branding.

This acquisition is likely to be accretive by 3 cents to 2015 earnings. Consequently, 3M updated its 2015 earnings guidance and expects full-year GAAP earnings to be in the range of $7.73 to $7.93 per share versus its previous guidance of $7.80 to $8.00. We remain encouraged by such focused attempts of the company to maintain a steady growth curve.

3M currently has a Zacks Rank #3 (Hold). Other better-ranked stocks in the broader Industrial Goods sector worth reckoning include Northrop Grumman Corporation NOC , Lockheed Martin Corporation LMT and General Dynamics Corporation GD , each carrying a Zacks Rank #2 (Buy).

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NORTHROP GRUMMN (NOC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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