3M's Transportation and Electronics Growth Picks Up: More Upside to Come?

3M Company MMM has been benefiting from persistent strength in its Transportation and Electronics segment. The segment’s total revenues increased 2.4% year over year while organic revenues grew 1.8% in third-quarter 2025.

The results were driven by strength in the transportation and aerospace end markets. Solid momentum in the commercial branding and automotive markets, driven by demand for new products and expanding sales coverage, has aided the segment’s performance. The electronics business also contributed positively in the quarter, fueled by new product introductions and better sales coverage. Also, an increase in demand for filtrete filters, scotch tape and Meguiar's products bodes well for the segment.

These gains reflect MMM’s efforts to improve its go-to-market strategy, enhance operational execution and introduce new products. The company’s cross-selling opportunities, commercial excellence and improved supply-chain management also supported the segment’s results.

While the transportation business showed strong momentum, softness in the advanced material business remains a concern. Lower demand for PFAS-manufactured products continues to weigh on the segment’s results. Softness in the Auto OEM market, due to weaker auto build rates, is concerning for the segment as well.

Despite these challenges, 3M’s ongoing product innovation, expanding customer reach and strength across key transportation, aerospace, and electronics markets position the segment to deliver steady performance in the quarters ahead.

Segmental Snapshot of MMM’s Peers

Among 3M’s major peers, Honeywell International Inc. HON is witnessing strength in its commercial aviation aftermarket business, driven by solid demand in the air transport market and supply-chain improvements. In the third quarter of 2025, Honeywell’s commercial aviation aftermarket sales increased 19% year over year. Recovery in Honeywell’s commercial aviation original equipment (OEM) business due to improved production and reduced customer destocking has also been proving beneficial.

Its another peer, ITT Inc.’s ITT Connect and Control Technologies segment is benefiting from solid demand for commercial aerospace components and connectors. Also, the acquisition of kSARIA augurs well for ITT’s segment. Revenues from the ITT’s unit rose 25.1% year over year on a reported basis and 6.1% organically in the third quarter of 2025.

The Zacks Rundown for MMM

Shares of 3M have gained 27.1% in the past year against the industry’s decline of 5.1%.

From a valuation standpoint, 3M is trading at a forward price-to-earnings ratio of 20X, above the industry’s average of 14.12X. MMM carries a Value Score of D.

The Zacks Consensus Estimate for MMM’s 2025 earnings has increased over the past 60 days.

MMM stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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