I Picked 3M as a Top Value Stock for 2025, But Is It Still a Great Value Today?

Core Viewpoint - 3M has shown strong performance in 2025 despite challenging market conditions, making its stock attractive for investors [1] Group 1: Company Performance - 3M's stock price increased by 24% in 2025, outperforming the S&P 500 index, which gained 16.4% [3] - The company achieved organic sales growth of 2.1% in 2025, which was at the low end of management's guidance of 2% to 3% [3] - Operational improvements under CEO Bill Brown have led to better key metrics, including on-time deliveries and overall equipment effectiveness [4][6] Group 2: Operational Improvements - Key operational metrics have improved significantly from 2024 to 2025, including: - On-time in full deliveries (OTIF) increased from 87% to over 90% [5] - Overall equipment effectiveness (OEE) rose from 60% to 63% [6] - Cost of poor quality decreased from 7% to 6% [6] - New Product Vitality Index (NPVI) improved from 11% to 13% [6] - New product launches increased from 169 to 284, with expectations of 350 in 2026 [6] - Operating profit margin expanded to 23.4% in 2025 compared to 21.4% in 2024 [6] Group 3: Future Outlook - Management's guidance for 2026 indicates a modest organic sales growth of 3%, amid a decelerating industrial production index [7] - Earnings-per-share guidance for 2026 is set between $8.50 and $8.70, with implied free cash flow guidance of at least $4.6 billion [9] - The stock is valued at 18.1 times earnings and 18 times free cash flow for 2026, which are considered attractive for a mature industrial company [9][10] - A low double-digit return on the stock is anticipated, with potential for better performance if economic conditions improve [10]