3M Beats Lowered Expectations, But The Second Half Has Challenges

The wilder the party, the worse the hangover, and 3M (MMM) shares were definitely a major beneficiary of the Street’s overheated enthusiasm with industrials going into the start of this year. Still down a quarter from its peak, 3M is looking at a slow process of rebuilding expectations and investor trust, even though the company’s “disappointments” were really not all that egregious.

3M posted decent second-quarter results, with surprisingly strong pricing, but margin concerns will persist and the company is looking at some challenging growth comps in the second half of the year. Valuation is more reasonable now, but stocks like Honeywell (HON) and Eaton (ETN) appear to offer more value among the U.S.-centric multi-industrials.

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3M Beats Lowered Expectations, But The Second Half Has Challenges