Sunday, December 2, 2018

As Expected, Evolution, Not Revolution, From 3M

When I previewed 3M’s (MMM) capital markets day in my last article on the company, I said that I expected a presentation that was more or less “more of the same”. It’s not really in 3M’s corporate DNA to make major course corrections, and besides, I think there is a lot of wisdom in following an approach of “if it’s not broken … don’t break it”. 3M more or less fulfilled those expectations, laying out a five-year plan that looks a lot like the company’s recent history, albeit with what I believe is a more growth-conscious focus.

Between a “steady as she goes” investor day and a disappointing third quarter hurt by what I’d call non-structural issues, there’s not a particularly strong case for liking 3M if you didn’t already like it. The valuation is not really in bargain territory and next year looks challenging given slowdowns in a lot of significant markets (including autos, electronics, and “general industrial”). Still, as a high-quality name and one of the most R&D-focused multi-industrials, I have no problem with holding on to 3M today as part of a long-term core portfolio.

Read more here:
As Expected, Evolution, Not Revolution, From 3M

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