3M's Transportation and Electronics Revenues Up in Q2: Can Momentum Last?

3M Company’s MMM Transportation and Electronics segment is experiencing a challenging yet gradually improving demand environment. In the second quarter of 2025, the segment’s adjusted organic revenues increased 1% year over year. 

The segment has been benefiting from strength in the transportation and aerospace end markets. Solid momentum in electronics, aerospace and defense, personal auto and commercial graphics markets, driven by demand for new products and expanding sales coverage, is also aiding the segment’s results. These gains reflect MMM’s ongoing focus on commercial excellence, targeted pricing actions and disciplined cost management. The company’s efforts to introduce new products, leverage cross-selling opportunities and increase customer engagement have also supported the segment’s results.

However, macroeconomic challenges and uneven global industrial production continue to weigh on the electronics side of the business. Demand in consumer electronics remains subdued, limiting a broader recovery in electronic materials and solutions. Softness in the Auto OEM market, particularly in the US and Europe, due to weaker auto build rates, is concerning for the segment as well.

While the segment has delivered steady progress and built momentum in several end markets, its ability to sustain growth will depend on improvements in auto OEM production and a rebound in electronics demand. Overall, the outlook remains positive, though future performance will be influenced by prevailing external market conditions.

Segmental Snapshot of MMM’s Peers

Among 3M’s major peers, Honeywell International Inc. HON is witnessing solid momentum in its Energy and Sustainability Solutions segment, driven by ongoing strength across UOP, specialty chemicals and materials businesses. In the second quarter of 2025, Honeywell’s segment’s revenues increased 15% year over year. It contributed approximately 17.8% of Honeywell’s total revenues during the quarter.

MMM’s another peer, ITT Inc.’s ITT Industrial Process segment is benefiting from strength in pump projects. Also, favorable pricing actions augur well for ITT’s segment. Revenues from ITT’s unit increased 7.6% year over year on a reported basis in the second quarter of 2025.

The Zacks Rundown for MMM

Shares of 3M have gained 23.9% in the past year compared with the industry’s growth of 2%.

From a valuation standpoint, 3M is trading at a forward price-to-earnings ratio of 18.98X, above the industry’s average of 16.41X. MMM carries a Value Score of D.

The Zacks Consensus Estimate for MMM’s earnings has increased over the past 60 days.

MMM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research