# 3M Stock: It Beat Earnings and RAISED Guidance — So Why We Say HOLD

Page: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/3m-stock-it-beat-earnings-and-raised-guidance-so-why-we-say-hold
Text version: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/3m-stock-it-beat-earnings-and-raised-guidance-so-why-we-say-hold.md
Podcast: [Charged Alpha Stock Encyclopedia](https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792)
Published: 2026-07-26T14:42:00+00:00
Episode link: https://chargedalpha.podbean.com/e/3m-stock-it-beat-earnings-and-raised-guidance-%e2%80%94-so-why-we-say-hold/
Audio file: https://mcdn.podbean.com/mf/web/w6vlei1hylwc720d/audio_t.mp3
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Duration seconds: 819

## Resource

3M Company (MMM) Q2 2026 — 3M (MMM), the Post-it and Scotch-tape industrial icon, reported a clean Q2 2026 adjusted beat: adjusted EPS of $2.40 topped the ~$2.27 estimate (+11% YoY) on sales of $6.5B with adjusted organic growth of 5.4%, and adjusted operating margin rose 40 bps to 24.9%. GAAP was messier — EPS of $1.78 and a 15.1% operating margin (down 290 bps), weighed by a divestiture loss and litigation costs. Management RAISED full-year adjusted EPS guidance to $8.80–$8.95 (from $8.50–$8.70). The stock (~$173, up ~24% off its $139 low) sits near its $177 52-week high. The catch: even our turnaround-leaning DCF lands fair value near $158 — below the price, before fully charging the multi-year PFAS and earplug cash bill. Our call: HOLD. 3M is one of the great American industrial turnarounds in progress — the Post-it, Scotch-tape and respirator maker that spent years as a litigation punching bag (PFAS, Combat Arms earplugs, tens of billions in settlements) and is now, under new CEO William Brown, quietly running well again. Q2 2026 was a clean adjusted beat: adjusted EPS of $2.40 beat the ~$2.27 estimate (+11% YoY), sales of $6.5B grew 5.4% organically, and adjusted operating margin expanded 40 bps to 24.9%. GAAP told a rougher story — EPS of $1.78 and a 15.1% operating margin, down 290 bps, dragged by a divestiture loss and litigation. Safety & Industrial led with +8.2% organic growth and a 27.8% margin; Transportation & Electronics rose ~5.9%; only Consumer lagged (-1.8%). Management RAISED full-year adjusted EPS guidance to $8.80–$8.95 (from $8.50–$8.70), with adjusted FCF of $1.3B and $1.4B returned to shareholders. So the debate isn't quality — it's price. The stock has re-rated ~24% off its $139 low to ~$173, near its $177 high, at ~19x forward earning…

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