MMM
3M Company
$159.96
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.6% above fair value
You pay
$159.96
Bear
$98.02
Fair
$122.52
Bull
$147.02
Bear
$98.02
-38.7%
$8.17 × 12x P/E
Fair
$122.52
-23.4%
$8.17 × 15x P/E
Bull
$147.02
-8.1%
$8.17 × 18x P/E
Adjust Assumptions
15.0x
8.17$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (33 analysts)
$191.00
Divergence from AlphaVal
36%
Summary
Applying a 15x P/E to adjusted EPS of $8.17, the base-case value is $122.52 per share.
Warnings
The company's reported profits differ from official accounting profits by 36%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $191.00 (from 33 analysts). Our estimate is 36% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples