Famed investor Jim Cramer says 3M (MMM) is transforming into “the old great growth company” again. His remarks arrive shortly after the conglomerate reported strong financials for its Q3.
3M saw its revenue pop by 4.1% to $6.5 billion in the third quarter on $2.19 per share of adjusted earnings. In comparison, analysts had called for $6.25 billion and $1.98 a share.
3M shares jumped more than 3.0% this morning, also because the management notched up its full-year guidance on Tuesday. It now sees the firm’s adjusted EPS hitting $8.0 on at least 2.0% organic growth.
Cramer now sees 3M stock as a ‘growth’ name
Jim Cramer’s optimism on 3M stock stems from what he sees as a fundamental turnaround in both operations and investor perception.
In a segment of CNBC this morning, the former hedge fund manager particularly highlighted the company’s margin expansion – adjusted gross margins rose by 280 basis points – as a key indicator of operational strength.
3M shares have already rallied more than 25% over the past six months – but they remain “a buy”, especially now that free cash flow is approaching $5.0 billion and legacy issues like groundwater contamination and litigation risks are largely resolved.
On Tuesday, Cramer even went on to suggest that 3M is evolving into a “growth stock” again, which investors once revered.
Solventum spin-off warrants owning 3M shares
The Mad Money host is constructive on the industrial giant also because it has spun off its health-care division – now called Solventum – into a separate publicly trading company.
While he “really liked the healthcare business”, he acknowledged the move’s potential to continue sharpening 3M’s focus and streamline operations.
The remaining core will center on safety, industrial, transportation, and consumer segments, which are already showing signs of margin improvement.
By separating the high-growth healthcare unit, MMM can better allocate capital and reduce complexity.
3M stock investors may also benefit from a clearer valuation framework, with each entity pursuing tailored growth strategies and attracting distinct investor bases.
In short, the breakup is a strategic unlock for long-term shareholder value.
How Wall Street recommends playing 3M heading into 2026
3M shares are currently going for a price-to-sales (P/S) multiple of 3.31, according to Barchart – a little over the sector average. But the company’s Q3 earnings suggest that the premium is more than justified.
That’s partly why Wall Street firms remain bullish on MMM shares for the next 12 months as well.
At the time of writing, the consensus rating on the industrial giant sits at “moderate buy” with price targets going as high $185 – indicating potential “upside” of another 15% from current levels.
3M stock currently pays a dividend yield of 1.82% as well, which makes it even more attractive to own for income-focused investors.
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