3M shares close lower on Wednesday, company’s outlook revised down to “Negative” at Moody’s

Moody’s Investors Service earlier this week revised down the outlook for 3M Company (MMM) from “Stable” to “Negative” and also maintained all ratings for the company – including the A1 senior unsecured debt rating and Prime-1 short-term rating.

3M shares closed lower for the fifth time in the past ten trading sessions in New York on Wednesday. The stock went down 0.89% ($1.18) to $131.54, after touching an intraday high at $134.69, or a price level not seen since March 20th ($139.24).

Shares of 3M Company have retreated 25.44% so far in 2020 compared with a 23.38% loss for the benchmark index, S&P 500 (SPX).

In 2019, 3M’s stock went down 7.41%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.

“After several years of raising debt to support a more aggressive shareholder return policy and acquisitions, near-term weakness and heightened uncertainty in most of 3M’s end markets now cast doubt on the company’s ability to keep leverage at levels commensurate with our prior expectations when 3M undertook the 2019 Acelity acquisition,” David Berge, Moody’s Senior Vice President and lead analyst for the company, said in a press release.

“As well, the specter of continued and potentially rising environmental liabilities puts additional pressure on 3M’s financial risk profile,” Berge added.

Analyst stock price forecast and recommendation

According to CNN Money, the 15 analysts, offering 12-month forecasts regarding 3M Company’s stock price, have a median target of $160.00, with a high estimate of $205.00 and a low estimate of $127.00. The median estimate represents a 21.64% upside compared to the closing price of $131.54 on March 25th.

The same media also reported that at least 13 out of 18 surveyed investment analysts had rated 3M Company’s stock as “Hold”, while 2 – as “Buy”. On the other hand, other 2 analysts had recommended selling the stock.