3M upgraded at Morgan Stanley on signs of turnaround and lowered expectations

[3M World Headquarters]
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Morgan Stanley late Tuesday upgraded 3M (NYSE:MMM [https://seekingalpha.com/symbol/MMM]) to Equal Weight from a previous investment rating of Underweight, saying the industrial conglomerate appears to be “turning a corner” after several years of lagging performance.

Analyst Christopher Snyder said investor expectations for the company have reset to more realistic levels, while early evidence suggests management’s turnaround plan under new Chief Executive Bill Brown is beginning to deliver results.

“Both buyside and sell-side expectations have softened over the last 12 months,” the report noted, adding that 3M’s organic growth is now tracking ahead of the broader macroeconomic environment.

In the third quarter, organic growth improved to 3.2%, up from 1.5% in the first half of 2025, driven by a 30% increase in sales from newer products, better delivery performance and stronger cross-selling opportunities.

“This signals macro outgrowth which we think can be sustained into 2026,” the analysts wrote.

Morgan Stanley now values the stock at 21 times 2026–27 earnings, a roughly 10% discount to the S&P 500 multiple, reflecting what it sees as a more balanced risk-reward profile. The firm cited 3M’s self-help initiatives—including product innovation, operational improvements, and a focus on consumables—as drivers of more durable growth.

Morgan Stanley raised its price target on 3M (NYSE:MMM [https://seekingalpha.com/symbol/MMM]) to $160 from $130 a share.

While risks remain around tariffs, litigation liabilities and potential channel destocking, Morgan Stanley said 3M’s outlook is improving as its growth trajectory aligns closer with U.S. industrial output.

“We view 3M (MMM [https://seekingalpha.com/symbol/MMM]) as now relatively well positioned from a revision standpoint which should put underperformance in the rearview,” the report said.

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