3 Reasons to Avoid MMM and 1 Stock to Buy Instead

3 Reasons to Avoid MMM and 1 Stock to Buy Instead

Adam Hejl

Thu, February 19, 2026 at 1:05 PM GMT+9 3 min read

In this article:

MMM

+0.19%

^GSPC

-0.30%

3M has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 6% to $163.53 per share while the index has gained 6.7%.

Is now the time to buy 3M, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Do We Think 3M Will Underperform?

We’re sitting this one out for now. Here are three reasons we avoid MMM and a stock we’d rather own.

1. Slow Organic Growth Suggests Waning Demand In Core Business

Investors interested in General Industrial Machinery companies should track organic revenue in addition to reported revenue. This metric gives visibility into 3M’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, 3M’s organic revenue averaged 1.3% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations.

3M Organic Revenue Growth

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect 3M’s revenue to rise by 3.7%. While this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.

3. EPS Trending Down

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Sadly for 3M, its EPS and revenue declined by 1.6% and 5.5% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, 3M’s low margin of safety could leave its stock price susceptible to large downswings.

3M Trailing 12-Month EPS (Non-GAAP)

Final Judgment

3M doesn’t pass our quality test. That said, the stock currently trades at 19.6× forward P/E (or $163.53 per share). This valuation is reasonable, but the company’s shaky fundamentals present too much downside risk. There are better investments elsewhere. We’d recommend looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce.

Story Continues  

Stocks We Like More Than 3M

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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