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Analysts told investors that they believe the company has shown progress recently regarding the mounting legal liabilities it has faced in recent years.
In addition, the analysts note that cyclical exposures for the company are “quite attractive.”
“MMM has had one of the worst-performing organic top-line in MI recently, with organic sales declining -LSD% in 2023, vs the MI average up +MSD%. Much of this weakness is due to its high exposure to markets such as Electronics and Consumer. We think, though, that these markets are poised to improve in 2024, at least relative to the MI average,” the analysts wrote.
“Electronics demand is expected to rebound in ’24, when looking at smartphone or PC shipments. Electronics / SCI / Resi and consumer exposure are among our preferred exposures in MI, and MMM has high exposure to all three via the T&E / S&I / Consumer segments, respectively,” they added.
Furthermore, Barclays said it sees “outsized operating margin expansions ahead,” with margins “set for a substantial pick-up in 2024-2025, helped by a stabilizing top line and the latest cost-cutting effort, which was unveiled earlier this year.”
