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On Wednesday, Citi upgraded its outlook on 3M (NYSE:MMM) stock, raising its price target to $114 from $104 previously, while maintaining a Neutral rating on the stock. The adjustment comes as 3M prepares for the upcoming spinoff of its healthcare segment, called Solventum, scheduled for April 1.
Citi’s analysis suggests a higher implied valuation for the remaining part of the company, called RemainCo. This reassessment is attributed to several factors, including changing dynamics in key end markets such as electronics, the early arrival of a new CEO, and a restructuring of the company’s portfolio to make it more streamlined and optimized.
The Citi analyst acknowledged the complexity of the spin-off process, noting that there are still several uncertainties to address. These include possible changes to the dividend and cost management that will not be transferred to the Healthcare sector. Despite these challenges, the analyst’s commentary indicates a belief that 3M is strategically positioned to increase value following the completion of the Solventum spinoff.
The market is expected to react to these changes as more details become available and as the April 1 date for the Solventum spin-off approaches. 3M shareholders will monitor the impact of these developments on the company’s financial performance and market position.
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