3M Rallies, Is Disney For Sale?

Dow Jones Industrial Average giants 3M (MMM) and Disney (DIS) were among the top premarket movers Tuesday after a string of updates from analysts. MMM stock rallied Tuesday while DIS stock swung higher.

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3M

Bank of America Securities upgraded industrial manufacturing giant 3M to neutral from underperform on Tuesday. 3M avoided a trial in a June settlement for a lawsuit regarding municipal drinking water containing PFAS, or “forever chemicals.” The settlement, which ranged from $10.5 billion to $12.5 billion, was below expectations and the stock performed well following the initial settlement announcements, BofA wrote in a research note.

In addition, 3M’s restructuring plans are currently “underappreciated,” and the health care spinoff planned later this year or in early 2024 should unlock value and provide positive short-term catalysts, BofA said.

The firm maintained its $110 price target on shares — 10% above where the stock closed on Monday. However, Wells Fargo and Citi both lowered their price targets on MMM stock Monday.

Wells Fargo cut its target to $100 from $110 but maintained its equal weight rating on shares. In a research note, Wells Fargo said it sees modest upside risk to Q2 earnings per share and expects modest guidance revisions from a backdrop of higher valuations, which poses a tougher setup for the quarter.

Citi wrote demand trends for U.S. industrials are “still durable” and should support relatively solid results compared to expectations. But Citi thinks most companies will remain cautiously optimistic relative to expectations in the second half of the year due to mixed economic trends and more difficult year-over-year growth comparisons vs. 2022. Citi lowered its price target to $100 from $120 and kept a neutral rating on shares.

MMM stock rallied 4.8% higher Tuesday. Shares are down 15% so far this year.

Disney Stock

Meanwhile, Needham said Tuesday that it believes Disney will be acquired during the next three years, CNBC’s Carl Quintanilla tweeted. Needham said that Disney owns the best assets in the media business, has no controlling shareholder to block a takeover, and has no permanent CEO or CFO that has a conflicting agenda vs. public shareholders, according to Quintanilla.

Longtime CEO Bob Iger returned to lead the Dow Jones media giant in November on a two-year stint to steer the company and head the search to find a new executive.

Rosenblatt also lowered its price target on DIS stock to $111 from $118 early Tuesday but maintained a buy rating on the shares. “This is shaping up as a difficult period for Disney,” the firm wrote in a research note. And while Rosenblatt reduced estimates, the firm said that Disney’s asset value “is meaningful, and seems likely to be realized, one way or another.”

Disney stock climbed 1.6% Tuesday. It has gained 3% in 2023.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

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