3M(MMM) The Motley Fool·2025-03-05 13:39Core Insights - 3M's recent investor day did not lead to significant stock price movement, as the three-year targets were solid but not inspiring enough for investors to upgrade expectations significantly [1][2] - There is a strong case for 3M to deliver good returns in the coming years, making the stock attractive for many investors [2] Financial Targets - Management outlined financial targets including organic sales growth of 1.2% for 2024, 2%-3% for 2025, and expectations to outperform macro conditions for 2026/2027 [6] - The operating margin target is set at 21.4% for 2024, with an aim for a 130 to 190 basis points expansion in 2025 and approximately 100 basis points annually thereafter [6] - Earnings per share (EPS) is projected at 7.60-4.9 billion in 2025, with over 100% conversion from net income anticipated [6] Potential Returns - Assuming a midpoint EPS of 9.04 by 2027, leading to a stock price of 7 billion in 2018 to $2.4 billion in 2024, with the New Product Vitality Index (NPVI) falling to 10% in 2024 from 33% a decade ago [9][10] - Management plans to increase NPVI to about 20% by 2027 through focused investment and process improvements [10] Management Insights - The chief technology officer outlined reasons for the decline in NPIs, which are expected to be temporary [11] - Management is committed to improving research and development, addressing PFAS-related changes, and adapting to the absence of the healthcare business, which has been spun off [12][14] Investment Outlook - If 3M can achieve operational improvements to enhance long-term margins and NPIs, the market may begin to price in better growth prospects, with the potential for an 8.4% total return having upside [13]