Goldman Sachs maintains its Buy rating on 3M and raises its 12-month target price to $202

Overview

This report is Goldman Sachs' company research and rating adjustment report on 3M Co. The core conclusion is to maintain the Buy rating and raise earnings estimates and the target price due to stronger growth momentum, better-than-expected first-half performance, and continued productivity improvements. 3M reported 2Q26 adjusted EPS of $2.40, segment EBIT of $1.614bn, and adjusted organic sales growth of 5.4%; the company also raised FY26 EPS guidance to $8.80-$8.95.

Core views

Goldman Sachs believes 3M is beginning to see benefits from its commercial excellence initiatives and new product introductions, with 2H26 organic growth expected to remain above the approximately 3.5% full-year guidance level. General industrial, safety, semiconductor, data center, and aerospace demand, approximately 2% pricing contribution, and a higher proportion of new product introductions are the main supporting factors; weakness in consumer electronics and automotive partially offsets them. Looking ahead to 2027, as new product vitality approaches 20%, growth should become more driven by new products, while productivity, business simplification, and improved asset utilization should continue to drive margin expansion.

Analysis framework

The report combines an earnings update, changes in company guidance, segment organic growth, earnings estimate revisions, and a rolling valuation multiple. Goldman Sachs raised its FY26/FY27/FY28 EPS estimates by $0.15 each and, while maintaining a 13.5x Q5-Q8 target multiple, raised the 12-month target price from $190 to $202.

Methodology notes

• Valuation methodsTarget Multiple Valuation

  13.5x Q5-Q8 target multiple

  Goldman Sachs rolled forward its earnings estimates and maintained the 13.5x Q5-Q8 target multiple, thereby raising 3M's 12-month target price to $202.

• Factor AnalysisGS Factor Profile

  Growth, Financial Returns, Multiple, and Integrated percentiles

  Goldman Sachs' factor framework compares individual stocks with the covered market and industry peers across growth, financial returns, valuation multiples, and integrated percentiles.

• M&A ScenarioM&A Rank

  M&A Rank 3

  The report lists 3M's M&A Rank as 3, indicating a low probability of acquisition and that it is generally not an important component of the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 3M Co. (MMM.N)

  Core covered security; Buy rating maintained and target price raised

  Strengths

  Strong organic growth, above-consensus segment EBIT, higher FY26 guidance, initial benefits from commercial excellence initiatives and new product introductions, and productivity and asset utilization improvements supporting margin expansion.

  Weaknesses

  Consumer segment organic sales declined 2.1% in 2Q26, while weakness in consumer electronics and automotive created a partial drag on 2H growth.

  Comparison

  2Q26 segment EBIT was approximately 3% above the FactSet consensus estimate; Goldman Sachs raised its EPS estimates and target price from previous levels.

  Risks

  Higher-than-expected legal liabilities, weaker-than-expected growth and margin execution, and unfavorable revaluation of capital returns and valuation multiples.

• Safety and Industrial

  3M business segment and one of the primary contributors to 2Q26 growth

  Strengths

  Strong 2Q26 organic growth of 8.2%.

  Weaknesses

  The report does not provide specific weaknesses for this segment.

  Comparison

  The highest growth among the three disclosed segments.

  Risks

  A slowdown in industrial demand or execution could affect the sustainability of overall growth.

• Transportation and Electronics

  3M business segment with exposure to semiconductor, data center, consumer electronics, and automotive-related demand

  Strengths

  2Q26 organic growth of 5.9%; semiconductor and data center demand were identified in the report as supporting factors.

  Weaknesses

  Weakness in consumer electronics and automotive partially offset performance.

  Comparison

  Growth was lower than in Safety and Industrial but significantly better than in the Consumer segment.

  Risks

  Weak end-market demand in consumer electronics and automotive could weigh on segment performance.

• Consumer

  3M business segment that performed relatively weakly in the report

  Strengths

  The report does not emphasize positive drivers for this segment.

  Weaknesses

  Organic sales declined 2.1% in 2Q26.

  Comparison

  The weakest performer among the three disclosed segments.

  Risks

  Sustained weakness in consumer demand could weigh on overall organic growth.

Key data

• 12-month target price$202.00Raised from $190 previously.
• Current price$170.76Price disclosed on the report cover.
• Implied upside18.3%Based on the target price and current price.
• 2Q26 adjusted EPS$2.40Quarterly adjusted EPS reported by the company.
• 2Q26 segment EBIT$1.614bnApproximately 3% above the FactSet consensus estimate.
• 2Q26 adjusted organic sales growth5.4%The primary driver of the better-than-expected performance.
• FY26 EPS guidance$8.80-$8.95Raised from $8.50-$8.70 previously.
• Goldman Sachs FY26/FY27/FY28 EPS estimates$8.95/$9.95/$10.75Previously $8.80/$9.80/$10.60.
• 2026E revenue$25,508.6mnGoldman Sachs estimate.
• 2026E EBIT margin24.1%2027E and 2028E are 25.8% and 27.0%, respectively.
• Market capitalization$94.5bnDisclosed in the report's Key Data.
• Enterprise value$100.4bnDisclosed in the report's Key Data.

Impact & implications

The report has a positive implication for 3M's share price: the upward revisions to earnings estimates and the target price reflect Goldman Sachs' confidence in the sustainability of growth, margin improvement, and execution quality. If commercial excellence, new product introductions, productivity improvements, and better asset utilization continue to materialize, 3M may see further upside in growth and margins in the second half of 2026 and in 2027.

Risks

• Legal liabilities exceed expectations.
• Growth and margin execution fall short of expectations.
• Unfavorable revaluation of capital returns and valuation multiples.
• Weak consumer electronics and automotive demand could offset growth contributions from general industrial, safety, semiconductors, data centers, and aerospace.

What to watch

• Whether 2H26 organic growth remains above the approximately 3.5% FY26 full-year guidance level.
• Whether the contribution of commercial excellence initiatives and new product introductions to revenue growth continues to expand.
• Whether new product vitality approaches 20% in 2027.
• Whether productivity, business simplification, and improved asset utilization can continue to drive margin expansion.
• Whether management continues to advance ahead of schedule toward its approximately 25% margin target for 2027.
• Changes in legal liabilities, capital returns, and valuation multiples.