Markets
MMM

The MMM Paradox: Analysts Bearish But Forecast 11.27% Gains

ETF Channel above

Recent MMM Analyst Ratings Breakdown
» Current 1 Month Ago 2 Month Ago 3 Month Ago
Strong buy ratings: 0 1 3 3
Buy ratings: 0 0 1 1
Hold ratings: 7 7 5 5
Sell ratings: 0 0 0 0
Strong sell ratings: 2 2 2 2
Average rating: 3.44 3.2 2.73 2.73

The average rating presented in the last row of the table above is from 1 to 5, where 1 would be a consensus Strong Buy and 5 would be a consensus Strong Sell. In the middle, 3 would be a Hold. So anything above 3 leans toward Sell as the average analyst sentiment. The average rating of 3.44 for MMM leans towards Sell, yet the MMM price target paints a different picture. Clearly, there is something more to the story here that is worth investigating for investors looking at 3M Co. Of course, the average price target is just that — a mathematical average, and is only one metric. There are analysts with lower targets than the average, including one looking for a price of $143.00. And then on the other side of the spectrum one analyst has a target as high as $228.00. The standard deviation is $25.266.

But the whole reason to look at the average in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes — much like with guessing the number of jelly beans in a jar, where the average guess tends to be very close. And so with MMM trading so far below that average target price of $187.88/share, the 11.27% upside to that average target does seem to be a paradox against the bearish analyst ratings. Might analysts be behind the curve with their targets and downward adjustments are forthcoming? Or, is it time for some of these analysts to turn bullish and upgrade? One thing is for sure: this apparent paradox makes for a good "signal" to investors in MMM to spend fresh time assessing the company and deciding whether analysts have it right with their sentiment, or have it right with their price target for 3M Co. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on MMM — FREE.

10 ETFs With Most Upside To Analyst Targets »

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

In This Story

MMM

Other Topics

Stocks ETFs

Latest Markets Videos

    BNK Invest

    BNK Invest Inc. provides investment services and information. BNK Invest owns and operates a market news family of websites including DividendChannel, ETFChannel, StockOptionsChannel, and others, which make up an investor community featuring stock message boards, ratings, research, and strategies. BNK Invest caters to investing firms and individual investors internationally.

    Learn More