3M Shares Fall Despite Q4 Earnings and Revenue Beat
In-line 2026 forecast and recent analyst caution appear to overshadow the manufacturing giant's better-than-expected quarterly results.
3M Co. (NYSE: MMM) shares declined in trading on Tuesday after the industrial conglomerate reported fourth-quarter earnings and revenue that exceeded Wall Street's expectations, a sign that investors were unimpressed by a forward-looking forecast that merely met consensus.
The stock fell 1.93% to close at $167.80, as the market digested results that, while positive on the surface, failed to provide the strong catalyst needed to propel the shares higher. The negative reaction highlights the significant expectations already built into the company's valuation following a period of restructuring and strategic shifts.
For the fourth quarter of 2025, 3M posted an adjusted earnings per share of $1.83, narrowly beating the analyst consensus of $1.80. Revenue for the quarter came in at $6.1 billion, also ahead of the expected $6.01 billion. The company reported a 2.2% increase in adjusted organic sales, indicating modest underlying growth.
However, the company's initial guidance for the 2026 fiscal year appeared to temper investor enthusiasm. 3M projected full-year adjusted EPS in a range of $8.50 to $8.70, which aligns with the analyst consensus of $8.61. While solid, the in-line forecast suggested a lack of significant upside surprises in the year ahead, disappointing investors who had hoped for a more robust outlook.
The market's lukewarm reception comes amid a backdrop of growing caution from Wall Street analysts. In the weeks leading up to the earnings release, several major firms moderated their views on the stock. On January 16, JPMorgan downgraded 3M to Neutral from Overweight, citing concerns over revenue growth. This followed a similar move by Deutsche Bank in December, which cut its rating to Hold from Buy.
Some analysts have suggested that much of the optimism around 3M's turnaround—including the spinoff of its healthcare business and progress on major legal settlements—may have already been priced into the stock. According to commentary following the earnings release, the prevailing sentiment is that for the "New 3M" narrative to continue, the company must convincingly exceed, not just meet, expectations.
Management highlighted the company's solid execution and cost-saving measures as key drivers of the fourth-quarter performance. The company's focus remains on streamlining operations and driving growth in its core industrial, safety, and consumer segments as it moves past the complexities of its healthcare spinoff and ongoing litigation.
Investors will now be closely watching whether 3M can generate stronger-than-expected organic growth and margin expansion in the upcoming quarters to justify a higher valuation and renew confidence in its long-term growth trajectory.