Here Is My Top Blue Chip Stock to Buy Now

2 months ago 9

Lee Samaha, The Motley Fool

Sun, Apr 27, 2025, 3:05 PM 4 min read

3M (NYSE: MMM) precocious reported first-quarter net and demonstrated that it's making underlying advancement that importantly raises the upside imaginable for the banal upon a solution to the commercialized conflict. As such, the risk/reward calculation has moved successful favour of buying banal successful the multi-industry company, and it looks similar a large bargain close now. Here's why.

The cardinal takeaway from 3M's net study is that the economical situation negatively impacts the company's sales, but it's outperforming expectations connected margins and, ultimately, earnings. In addition, the institution continues to marque advancement connected the cardinal operational metrics of CEO Bill Brown's turnaround plans.

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First-quarter integrated income maturation of 1.5% was weaker than the implied guidance astatine the commencement of the twelvemonth of astir 2.1%. However, adjusted net per stock (EPS) of $1.88 came successful up of the implied guidance of astir $1.71.

Moreover, management's commentary implies that this inclination volition proceed passim the year. For example, CFO Anurag Maheshwari told investors that 3M was "trending to the little extremity of our 2% to 3%" guidance for full-year integrated income growth. He besides said, "We spot upside to the midpoint of our borderline and net guidance range."

He besides noted that 3M was trending $0.10 amended than its full-year guidance of EPS of $7.60 to $7.90, but absorption shaved $0.10 disconnected its expectations arsenic a contingency for the "current environment."

As such, if the tariff quality is resolved and 3M's income outlook tin improve, it's tenable to expect a operation of operational leverage (margin enlargement owed to much income volume) and amended operational show connected borderline (as demonstrated successful the archetypal quarter) to pb to upside imaginable for EPS successful 2025.

In addition, 3M's advancement connected Brown's cardinal operational metrics suggests that investors volition commencement to spot net betterment successful the adjacent and agelong term.

First, Brown wants to boost the semipermanent maturation complaint by restoring a civilization of innovation and releasing caller merchandise introductions (NPIs). While it volition instrumentality clip to make genuinely breakthrough products, 3M tin absorption connected NPIs similar merchandise enactment extensions. In fact, 3M launched 169 NPIs successful 2024 (up 32% implicit 2023), and successful the caller archetypal 4th unsocial launched 62 NPIS, with Brown intending to motorboat 215 done 2025 and 1,000 implicit the adjacent 3 years.