3M's Safety & Industrial Growth Picks Up: A Sign of More Upside?

The strongest driver of 3M Company’s MMM business at the moment is the persistent strength in its Safety and Industrial segment. Strong momentum in electrical, roofing granules, industrial adhesives and tapes, industrial specialties and personal safety markets has been driving the segment’s performance. In the first quarter of 2025, sales from the electrical and industrial adhesives & tapes markets grew in high-single-digit, while sales from roofing granules, industrial specialties and personal safety markets increased in low-single-digit.

Solid demand for cable accessories, driven by an increase in the construction of data centers and renewable energy projects, led the segment’s growth. Also, an increase in orders for industrial and electronics bonding solutions proved beneficial. The segment delivered an organic sales growth of 2.5% year over year in the first quarter. The segment’s operating income margin increased year over year, driven by benefits from sales growth, productivity and lower restructuring costs, partially offset by continued growth investments in the business.

Backed by strength across its businesses, the company provided a positive outlook. For 2025, 3M expects total adjusted organic sales to grow 2-3% on a year-over-year basis. Adjusted earnings are projected to be in the range of $7.60-$7.90 per share. The midpoint of the guided range is $7.75, which reflects an increase from earnings of $7.30 per share reported in 2024.

Segmental Performance of MMM’s Peers in Q1

Among 3M’s major peers, Honeywell International Inc. HON is witnessing strength in its commercial aviation aftermarket business, driven by growth in air transport flight hours, higher shipset deliveries and supply-chain improvements. In the first quarter, Honeywell’s commercial aviation aftermarket sales increased 14% year over year. Strength in Honeywell’s defense and space business, owing to stable U.S. and international defense spending volumes, has also been proving beneficial.

Its another peer, Carlisle Companies Incorporated CSL, is benefiting from strength in the Construction Materials segment, driven by robust demand for reroofing products. Higher sales in the non-residential construction market in the United States and Europe, driven by the acquisition of MTL and growing re-roof activity as a result of pent-up demand, have been driving Carlisle’s performance. In the first quarter, revenues from the Carlisle Construction Materials segment increased 2% year over year.

The Zacks Rundown for MMM

Shares of 3M have gained 14% in the year-to-date period compared with the industry’s growth of 0.7%.

From a valuation standpoint, 3M is trading at a forward price-to-earnings ratio of 18.57X, above the industry average of 16.72X. The metric is pegged higher than its five-year median of 15.98X. MMM carries a Value Score of D.

The Zacks Consensus Estimate for MMM’s earnings for second-quarter 2025 and 2025 has declined 1% and 1.3%, respectively, in 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.

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

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