UBS upgrades 3M to buy, says shares can rally more than 40%

3M is poised to see a return to steady growth in the months ahead, according to UBS. The bank raised its rating on the stock buy from neutral and hiked its price target to $184 from $130, reflecting more than 41% upside. Shares were nearly 1% higher in the premarket following the move. This year, the stock has risen more than 42%. MMM YTD mountain MMM, year-to-date Analyst Amit Mehrotra thinks CEO William Brown – who assumed the role on May 1 – is already making substantive change at the company. Mehrotra highlighted Brown’s focus on new product innovation through reallocating research and development spending and on sales growth through improving order fill rates. “We see the potential for its new CEO to drive meaningful change at this 120-year-old company,” he told clients in a Tuesday note. “These changes can drive improvement in organic sales growth and [operating] margin, which will drive EPS upside and justify a better multiple on the underlying company than is currently implied in the stock price.” Mehrotra said the company could see 40% earnings growth by 2028, if the CEO is successful in his efforts. The analyst also sees potential for meaningful share buybacks, citing around $7.5 billion in repurchases between 2025 and 2028. Mehrotra is among the 10 analysts on Wall Street who have a strong buy or buy rating on the name, per LSEG. The average price target of $144.74 implies around 11% upside.