Dow Jones Notebook: 3M Rallies, Is Disney For Sale?
Dow Jones Industrial Average titans 3M (MMM), and Disney (DIS), were among the biggest premarket movers on Tuesday, following a series of analyst updates. MMM stock rose Tuesday, while DIS stock climbed.
3M
Bank of America Securities upgraded the industrial manufacturing giant 3M from underperform to neutral on Tuesday. 3M avoided trial by settling a lawsuit in June regarding municipal drinking waters containing PFAS or "forever chemical." BofA's research note stated that the settlement was lower than expected and the stock price performed well after the initial announcements.
BofA also said that 3M's plans for restructuring are "underappreciated" and the spinoff of health care planned in late 2019 or early 2024 will unlock value and act as a positive catalyst.
The firm kept its price target of $110 on shares, which is 10% higher than the closing price on Monday. Wells Fargo & Citi lowered their MMM price targets Monday.
Wells Fargo reduced its target from $110 to $100 but kept its equal weight rating for the shares. Wells Fargo stated in a research report that it expects modest revisions to its Q2 guidance and sees modest downside risk for earnings per share. This is due to the higher valuations which create a more difficult quarter.
Citi stated that demand trends in the U.S. Industrials sector are "still durable", and this should lead to relatively strong results when compared with expectations. Citi believes that most companies are likely to remain cautiously positive in comparison to expectations during the second half of this year, due to mixed economic conditions and the difficulty of comparing growth year-over year with 2022. Citi reduced its price target from $120 to $100 and maintained a neutral rating for the shares.
MMM's stock rose 4% early on Tuesday. Shares have fallen 15.7% this year.
Disney Stock
Carl Quintanilla of CNBC tweeted that Needham believes Disney will be purchased within the next three to four years. Needham stated that Disney has the best assets within the media industry, that it has no controlling shareholders to prevent a takeover and that there is no permanent CEO or Chief Financial Officer with a conflicting agenda against public shareholders.
On a two-year tenure to steer the business and lead the search for a new executive.
Rosenblatt also lowered their price target for DIS to $111, from $118 on early Tuesday. They maintained a Buy rating on the stock. In a research report, the firm said that "this is shaping up to be a challenging period for Disney." Rosenblatt's estimates were reduced, but the firm still said Disney's assets "are meaningful and seem likely to be realized in some way."
The stock has gained 2.4% by 2023.