3M (NYSE: MMM) delivered better-than-expected results for Q1’25. The company posted adjusted revenue of $5.95 billion and adjusted earnings per share of $1.88, both exceeding consensus forecasts of $5.73 billion and $1.77, respectively. This strong showing was complemented by 3M’s reaffirmation of its 2025 guidance, which was well-received by the market. For those seeking steady upside beyond individual stocks, the High-Quality portfolio has outpaced the S&P with over 91% gains since inception.
In Q1 2025, 3M’s revenue stood at $6.0 billion, reflecting a 1% decline year-over-year. This overall dip resulted from mixed segment performance. The Transportation and Electronics segment saw the sharpest drop, down 5.4%, while the Consumer segment fell 1.4%. On the other hand, the Safety & Industrial segment posted modest growth of 0.5%. Factors such as ongoing supply chain disruptions, elevated inflation, and a stronger U.S. dollar have contributed to the slowdown. Additionally, soft demand in home improvement, auto-care, and packaging markets has weighed on the Consumer segment.
Despite lower revenue, 3M significantly improved its profitability. The adjusted operating margin rose by 220 basis points year-over-year to 23.5% in Q1. This improvement led to a 10% increase in adjusted earnings per share, which reached $1.88. Looking ahead, 3M expects its full-year 2025 adjusted EPS to range between $7.60 and $7.90, though it anticipates a potential headwind of $0.20 to $0.40 per share from tariffs.
Markets responded favorably to the results and outlook, with MMM stock jumping 6%. However, on a broader timescale, MMM’s performance has been inconsistent. Over the past four years, the stock’s annual returns were 5% in 2021, -30% in 2022, -3% in 2023, and a sharp rebound of 46% in 2024.
In comparison, the Trefis High Quality Portfolio, comprised of 30 carefully selected stocks, has been far less volatile and has consistently outperformed the S&P 500 over the same timeframe. Why? These stocks tend to offer higher returns with lower risk, offering a smoother ride, as illustrated in the HQ Portfolio performance metrics.
Given the macroeconomic challenges from tariffs and rising trade tensions with China, investors are wondering if MMM will underperform the S&P 500 again over the next year, repeating its trends from 2021 to 2023—or if it’s positioned for a turnaround. While updated guidance is pending, our initial analysis suggests limited short-term upside for MMM stock.
MMM stock currently trades at $134, with a trailing P/E ratio of 18x—higher than its five-year average of 16x. Although 3M posted solid Q1 results, we believe the recent rally has constrained further upside. Investors may prefer to wait for a potential pullback before initiating a position.
While MMM appears fairly valued, it’s useful to evaluate how 3M’s Peers compare on key metrics. You can explore additional cross-industry comparisons at Peer Comparisons.
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