MMM Fair Value Estimate
$77.6648.4% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
3M Company
Exchange: NYSESector: IndustrialsIndustry: Conglomerates
3M Company (3M) is a diversified technology company. The Company operates in six segments: industrial and transportation; healthcare; consumer and office; safety, security and protection services; display and graphics, and electro and communications businesses. 3M products are sold through a number of distribution channels, including directly to users and through wholesalers, retailers, jobbers, distributors and dealers in a range of trades in a number of countries worldwide. In April 2012, it acquired CodeRyte Inc. In September 2012, it acquired the business of Federal Signal Technologies Group (FSTech) from Federal Signal Corporation. On November 28, 2012, the Company acquired Ceradyne, Inc.
Did you know?
Capital expenditures decreased by 27% from FY24 to FY25.
Current Price
$150.50
+0.89%GoodMoat Value
$77.66
48.4% overvaluedProfile
Valuation (TTM)
Market Cap$79.95B
P/E24.60
EV$84.53B
P/B17.00
Shares Out531.23M
P/Sales3.20
Revenue$24.95B
EV/EBITDA15.58
3M Company (MMM) Valuation
GoodMoat Analysis
The current price of $148.05 is significantly above the GoodMoat Target of $77.66, indicating a negative margin of safety. The P/E of 24.2x appears elevated relative to the company's minimal revenue growth and high debt levels. This valuation is unfavourable for a value investor seeking a margin of safety.
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Based on the GoodMoat Investment Framework's valuation assessment, 3M's current price of $148.05 is 90.6% above the platform's fair value target of $77.66. This results in a negative margin of safety, placing it firmly in the 'Unfavourable' band according to the framework's DCF-based thresholds, which require a margin of at least 20% to be considered favourable. The forward P/E ratio of 24.2x must be contextualized against the company's fundamentals. With a revenue growth rate of only 2.0% YoY, the P/E is high relative to growth, and the company's significant debt burden, evidenced by a Debt/Equity ratio of 2.68, further weighs on quality. While the P/E may not be extreme in an absolute sense, it is expensive for a low-growth, highly leveraged industrial conglomerate. The low Free Cash Flow Yield of 1.9% also suggests the market price is not supported by strong current cash generation. When integrating valuation with the provided business data, the stock appears expensive relative to its quality, offering no margin of safety for a value-oriented investor. Analysis based on data as of 2024-05-15.
MMM Valuation Metrics
FCF$1.49B
FCF Growth Rate-19.54%
EPS Growth (CAGR)-19.54%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →MMM Valuation & Fair Value Analysis
3M Company (MMM) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for 3M Company is $77.66. The current stock price is $150.50, suggesting the stock is 93.8% overvalued.
The price-to-earnings (P/E) ratio is 24.60. Price-to-book ratio is 17.00. Price-to-sales ratio is 3.20. Enterprise value to EBITDA is 15.58. PEG ratio is -1.23.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of 3M Company's intrinsic value.