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4 days ago
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4 Diversified Operations Stocks to Consider on Promising Industry Trends
The Zacks Diversified Operations industry is poised to gain from strength across the aerospace, defense, and oil & gas industries. Growth in commercial aviation and steady demand in the medical and life science markets are key catalysts for the industry's growth. Higher infrastructure development, product innovation and technological advancements are also providing persistent weakness in the manufacturing sector and supply-chain issues have been weighing on the performance of some industry players. Honeywell International Inc. HON, 3M Company MMM, Carlisle Companies Incorporated CSL and Federal Signal Corporation FSS are a few industry participants that are likely to capitalize on the opportunities. About the Industry The Zacks Diversified Operations industry includes companies that operate in various end markets, including oil & gas, industrial, electronics, power, aviation, technology, finance, healthcare, chemical, non-residential construction and transportation. Such companies manufacture and provide equipment and solutions, including bioprocessing products, molecular testing-related products, gas and steam turbines, generators, commercial jet engines and engineered fluid-process equipment. Industry players also provide related services to a large customer base. A few companies offer services in the agriculture, marine and telecommunications markets and are engaged in providing environmental and safety solutions. The diversified market operators have a vast global presence, with exposure in the United States, Japan, India, China, Canada and other countries. Major Trends Shaping the Future of the Diversified Operations Industry Strength in Aerospace and Defense Markets: The prospects of multi-sector companies primarily depend on the operating conditions of several end markets. Some factors that currently favor the industry are healthy demand from the aerospace, defense and governmental sectors, stability in the oil and gas market and infrastructure development. Industry players with exposure in the commercial aviation markets are poised to gain from healthy growth in air transport flight hours. Also, solid demand for several products and equipment in the consumer and professional, and home and building product markets bodes well for some industry in Innovation & Technological Advancements: The industry participants' constant focus on innovation, product upgrades and the development of new products to stay competitive in the market should drive growth. With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. Digitization enables industry participants to boost their competitiveness through enhanced operational productivity, product quality and better cost in the Manufacturing Sector: Weakness in the manufacturing sector has been denting the demand in the industry. After witnessing expansion in economic activities for the second consecutive month in February, the manufacturing sector contracted in March, April, May and June. Per the Institute for Supply Management's (ISM) report, the Manufacturing Purchasing Manager's Index touched 49% in June. A figure less than 50% indicates a contraction in manufacturing activity. Also, the New Orders Index remained in the contraction territory for the fifth consecutive month, registering 46.4% in Disruptions: Supply-chain disruptions, especially related to the availability of electrical and electronic components, have been concerning for the industry participants of late. The latest ISM report's Supplier Deliveries Index reflects slower deliveries for the seventh straight month in June. Supply-chain issues, if not controlled, might hinder the growth of diversified operation companies, going forward. Zacks Industry Rank Suggests Strong Prospects The Zacks Diversified Operations industry, housed within the broader Zacks Conglomerates sector, currently carries a Zacks Industry Rank #92. This rank places it in the top 38% of 245 Zacks group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to the bullish near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. However, it is worth taking a look at the industry's shareholder returns and current valuation first. Industry Lags the S&P 500 In the past year, the Zacks Diversified Operations industry has underperformed the S&P 500 composite. The industry has grown 6.9% compared with the S&P 500 Index's 13.7% rise. One-Year Price Performance Industry's Current Valuation On the basis of forward P/E (F12M), which is a commonly used multiple for valuing diversified operations stocks, the industry is currently trading at 17.82X compared with the S&P 500's the past five years, the industry has traded as high as 23.58X and as low as 13.70X, with a median of 16.71X, as the chart below shows: Price-to-Earnings Ratio Versus S&P 500 4 Diversified Operations Stocks Leading the Pack 3M: Based in St. Paul, MN, 3M operates as a diversified technology firm. It has manufacturing operations across the globe and serves a diversified customer base throughout the world. The company stands to gain from strong momentum in the Safety and Industrial segment, driven by strength in roofing granules, industrial adhesives and tapes and electrical markets. Solid momentum in the commercial aircraft and defense-related business and project wins in the advanced materials business are aiding its Transportation and Electronics of this Zacks Rank #2 (Buy) company have soared 23.3% in the past year. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.6%. the complete list of today's Zacks #1 Rank stocks here.. Price and Consensus: MMM Federal Signal: Based in Oak Brook, IL, this company provides a suite of products and integrated solutions including street sweepers, safe-digging trucks, industrial vacuum loaders and others for municipal, governmental and commercial customers. Federal Signal is well-well positioned to benefit from robust aftermarket demand and strong order intake, supported by effective pricing actions. Growth in demand for public safety equipment, industrial signaling equipment and warning systems has been driving its of this Zacks Rank #2 company have gained 16.6% over the past year. It beat estimates in each of the last four reported quarters, delivering an average earnings surprise of 6.4%. Price and Consensus: FSS Honeywell: Based in Charlotte, NC, Honeywell is a global diversified technology and manufacturing company with a wide range of products and services. Its diversified portfolio includes aerospace products and services, energy-efficient products and solutions for businesses and process technology. HON is gaining from strength in its commercial aviation aftermarket business, driven by solid demand in the air transport market. Strength in its defense and space business, owing to stable U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, has also been proving of the Zacks Rank #3 (Hold) company rose 11.1% in the past year. The company delivered better-than-expected results in each of the trailing four quarters, the average surprise being 6.7%. Price and Consensus: HON Carlisle: Based in Scottsdale, AZ, Carlisle engages in the design, manufacture and sale of a wide range of roofing and waterproofing products, engineered products and finishing equipment. CSL is gaining from growing re-roof activity in the construction sector. Strength in the Carlisle Construction Materials segment, driven by contributions from the MTL acquisition and healthy end-market demand, bodes well for Zacks Rank #3 company has delivered better-than-expected results in three of the trailing four quarters while missing the mark in one, the average surprise being 2.3%. Though the company's shares lost 2.4% in the past year, they rose 10.4% in the year-to-date period. Price and Consensus: CSL Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Honeywell International Inc. (HON) : Free Stock Analysis Report 3M Company (MMM) : Free Stock Analysis Report Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report Federal Signal Corporation (FSS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
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4 days ago
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Post-It Maker 3M Defies Tariff Headwinds With Strong Q2 And Outlook Boost
Post-it maker 3M Company (NYSE:) stock surged Friday after it reported better-than-expected second-quarter 2025 results and raised its full-year guidance. The company posted GAAP sales of $6.3 billion, up 1.4% year over year. Adjusted sales came in at $6.2 billion, reflecting 1.5% organic growth and beating the consensus estimate of $6.09 billion. This marked 3M's third consecutive quarter of growth across all three business groups, with 13 of 16 divisions posting gains. Growth was led by strong performance in electronics and industrials, with China up mid-single digits and EMEA remaining flat. The adjusted operating margin expanded 290 basis points to 24.5%, driven by growth, productivity gains, and lower restructuring costs. These were partially offset by investments, tariffs, and foreign exchange impacts. Also Read: Adjusted earnings per share rose 12% year over year to $2.16, topping the Street estimate of $2.01. By segment, Safety & Industrial posted 3.6% adjusted sales growth to $2.86 billion, with adjusted operating margin expanding to 25.8% from 22.6%. Transportation & Electronics' revenue grew 1.9% to $1.94 billion, and its adjusted operating margin rose to 24.6% from 22.3%. View more earnings on MMM The Consumer segment saw modest 0.6% growth to $1.27 billion, with adjusted operating margin improving to 21.1% from 17.4% a year ago. 3M returned $1.3 billion to shareholders during the quarter and reported adjusted free cash flow of $1.3 billion, despite a $1.0 billion cash outflow from operations due to $2.2 billion in litigation-related payments. 2025 Guidance 3M now sees 2025 Adjusted EPS of $7.75-$8.0 (prior $7.60-$7.90) versus the consensus of $7.68, includes the impact from tariffs. 3M expects 2025 adjusted sales organic growth of ~2% (prior lower end of 2% to 3%), and operating cash flow of $5.1–$5.5 billion with >100% free cash flow conversion. 3M raised its full-year outlook, citing stronger productivity, a more measured investment pace amid softer demand and evolving tariffs, and a reduced foreign exchange headwind of $0.05, down from $0.15 previously. 'Our 3M eXcellence operating model is the foundation for delivering on each of our strategic priorities, and it drives the operating rigor and rhythm of our performance culture. With execution improving and solid results in the first half, we have confidence in our increased full-year EPS guidance, which now embeds the expected impact of tariffs,' commented William Brown, 3M Chairman and CEO. Price Action: At the last check on Friday, MMM shares were trading higher by 3.06% at $163.90 premarket. Read Next:Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? 3M (MMM): Free Stock Analysis Report This article Post-It Maker 3M Defies Tariff Headwinds With Strong Q2 And Outlook Boost originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
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5 days ago
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Barclays Raised the Firm's PT on 3M Company (MMM), Kept an Overweight Rating
3M Company (NYSE:MMM) is one of the . On July 9, Barclays raised the firm's price target on 3M Company (NYSE:MMM) from $164 to $170, while keeping an Overweight rating on the stock. The increased price target shows analysts' improved sentiment around the company as it gets close to releasing its Q2 2025 earnings report. The firm noted that there are high investor expectations for companies in the multi-industry sector as they approach Q2 earnings reports. Many firms, including 3M Company (NYSE:MMM), are seen as well-positioned to beat current earnings estimates and possibly raise future guidance. A specialized industrial laboratory, filled with high-tech machinery for producing abrasives. Moreover, the positive outlook comes despite soft consumer demand, highlighting the sector's ability to navigate a muted demand environment. The company, during its fiscal Q1 2025 results, provided a full-year outlook. Management expects the Adjusted EPS to be in the range of $7.60 to $7.90, with an additional tariff sensitivity of $0.20 to $0.40 per share. 3M Company (NYSE:MMM) is a diversified technology and manufacturing company specializing in innovative products across multiple industries. Its operations span safety and industrial goods, transportation and electronics, and consumer products. While we acknowledge the potential of MMM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
5 days ago
- Business
- Business Insider
3M Stock Bulls Prepare to Pump the Brakes on Eve of Earnings Gauntlet
3M Company (MMM) is a leading industrial powerhouse, but recent years have tested its resilience. Legal battles, rising costs, and restructuring efforts weighed heavily on its performance, causing shares to fall sharply over a prolonged period in the last five years. More recently, the stock has been finding its footing again, with the rebound driven by a diminished perception of risk and signs of returning growth. The past year's price action shows 3M outperforming the S&P 500 (SPX), but trouble may lie ahead. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. As MMM approaches its Q2 earnings report, set to be published before the market opens tomorrow, investors are eager to see if the turnaround story will continue strongly or if challenges remain too significant. The key question is whether 3M can sustain growth amid ongoing headwinds—from tariff impacts to lingering legal uncertainties—and justify its current valuation premium. I'm taking a cautious stance, rating 3M as a Hold ahead of earnings precisely because the outlook remains unclear. It's challenging to confidently predict a consistent growth trajectory without significant interference from macroeconomic headwinds. Rating 3M's Operations When we look at a capital-intensive business like 3M—a company producing a vast range of products and operating numerous plants, labs, and pieces of equipment worldwide—it's clear that efficiently managing investments and turning them into operating profits is key to creating value for shareholders. For example, by taking the company's operating income (EBIT) and dividing it by its net working capital (the money tied up in inventory, receivables, and payables that are essential for daily operations) plus the physical value of its assets (Property, Plant & Equipment), we get a return on investment metric that makes sense for a capital-heavy business like 3M. Right now, based on EBIT, working capital, and PP&E over the last twelve months, 3 M delivers an ROI of around 29%. On the surface, that looks solid—especially compared to an estimated weighted average cost of capital (WACC) of about 8%—but it's still well below the ROI of above 40% that the company consistently delivered four or five years ago. Coincidentally, 3M shares dropped over 50% from their mid-2021 peak to early 2024, only recently recovering to levels seen five years ago. The primary drivers of this decline have been ongoing litigation and escalating legal costs— particularly related to PFAS contamination (the so-called 'forever chemicals') and earplug lawsuits—which have added billions in potential liabilities, significantly impacting EBIT and increasing operating expenses. As a result, transformation initiatives have become unavoidable. In recent years, 3M has been actively restructuring and simplifying its portfolio, but that also comes with upfront charges, write-downs, and investments in new technologies. On top of that, the post-COVID surge in raw material costs, plus transportation and labor headwinds, has added even more pressure to the company's margins. A Closer Look at Latest Turnaround Developments The good news is that the market seems to be betting on a turnaround at 3M, especially with shares back near the $160 level again. In the most recent quarter (Q1), 3M posted organic revenue growth of 1.5% year-over-year, while expanding adjusted operating margins to 23.5%—an increase of 2.2 points year-over-year and already above the pre-pandemic level of 19.2%. In fact, based on the updated 2025 guidance, management was encouraged by the strong start to the year in Q1. They reaffirmed their outlook for organic sales growth of 2% to 3% —at or above macro trends —and EPS between $7.60 and $7.90, driven by margin expansion and an estimated conversion of about 100% of its earnings into free cash flow. Looking further ahead, long-term EPS growth is projected to yield a 5-year CAGR of around 6.6%, which is slightly lower than the 6.9% expected six months ago for the same period. At a similar pace, the 5-year revenue CAGR is now estimated at 3.9%, slightly softer than the 4.1% forecast made earlier this year. I would attribute these more cautious revisions mainly to the impact of tariffs. As management highlighted in Q1, tariffs are expected to have an annual impact of approximately $850 million, which could reduce EPS by about $0.20. Additionally, there are ongoing legal uncertainties, such as the billion-dollar settlements associated with PFAS and earplug lawsuits, which continue to drain cash and necessitate additional provisions. As Q2 results approach, the numbers to beat are an estimated EPS of $2.01 (up 4% year-over-year) and revenues of $6.1 billion (down 3% year-over-year). However, historically, it's the annual guidance that's often the primary driver of post-earnings sentiment. In this case, management's tone has been cautious, signaling that the solid Q1 performance might not carry through to full-year results, with tariff risks, softer GDP, and global auto production potentially weighing on projections. That's why I'm somewhat uneasy with 3M trading at roughly a 15% premium to the sector, based on an EBITDA multiple of 13.5x —nearly 20% above its own five-year average. Viewed through an earnings yield lens—using operating profit divided by enterprise value (a helpful measure for capital-intensive businesses)—3M's trailing figures translate to an earnings yield of about 4.5%, based on $4.15 billion in operating profit and a $91.1 billion enterprise value. That falls short of a reasonable weighted average cost of capital (WACC), even under optimistic assumptions. Put simply, the company's operating return doesn't adequately justify its risk and cost of capital. For an industrial blue chip still facing significant legal overhangs, I believe a 6%–7% earnings yield is more appropriate to compensate for that added risk. Reaching that level would most likely require a reduction in enterprise value, rather than a dramatic improvement in operating profit. Is 3M a Buy, Hold, or Sell? Although Wall Street's consensus is mostly bullish, there's still plenty of room for skepticism around the investment case. Of the 10 analysts covering the stock over the past three months, six are bullish, two are neutral, and two are bearish. MMM's average stock price target stands at $155.60, which implies ~1.2% downside from the current share price. Uncertainty Lingers for MMM Amid Legal Risks and Lofty Valuation I'd say the outlook remains somewhat opaque for 3M heading into its Q2 earnings. The growth and synergies from the turnaround, in my opinion, just don't put enough certainty behind the risks of betting on a business that could still disappoint on growth—while facing bigger legal and tariff headwinds—all while trading at what might be stretched multiples. That said, I'm keeping 3M rated as a Hold for the time being. Given tepid consumer demand and ongoing macroeconomic pressures, it remains uncertain whether the company can do more than just meet expectations—in other words, actually raise its guidance.
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5 days ago
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How To Earn $500 A Month From 3M Stock Ahead Of Q2 Earnings
3M Company (NYSE:MMM) will release earnings results for the second quarter before the opening bell on Friday, July 18. Analysts expect the Saint Paul, Minnesota-based company to report quarterly earnings at $2.01 per share, up from $1.93 per share in the year-ago period. 3M projects to report quarterly revenue of $6.05 billion, compared to $6.25 billion a year earlier, according to data from Benzinga Pro. On July 9, Barclays analyst Julian Mitchell maintained 3M with an Overweight rating and raised the price target from $164 to $170.. With the recent buzz around 3M, some investors may be eyeing potential gains from the company's dividends. Currently, 3M offers an annual dividend yield of 1.85% — a semi-annual dividend amount of 73 cents per share ($2.92 a year). So, how can investors exploit its dividend yield to pocket a regular $500 monthly? To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $323,786 or around 2,055 shares. For a more modest $100 per month or $1,200 per year, you would need $64,757 or around 411 shares. To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.92 in this case). So, $6,000 / $2.92 = 2,055 ($500 per month), and $1,200 / $2.92 = 411 shares ($100 per month). View more earnings on MMM Note that dividend yield can change on a rolling basis; the dividend payment and stock price both fluctuate over time. How that works: The dividend yield is computed by dividing the annual dividend payment by the stock's current price. For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40). Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price remains unchanged. Conversely, if the dividend payment decreases, so will the yield. MMM Price Action: Shares of 3M gained 0.6% to close at $157.56 on More:Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? 3M (MMM): Free Stock Analysis Report This article How To Earn $500 A Month From 3M Stock Ahead Of Q2 Earnings originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
