The giants of the Dow Jones Industrial Average 3M (MMM) and disney (DIS) were among the top premarket movers on Tuesday after a series of analyst updates. Both DIS and MMM stocks rose early in the stock.
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3M
Banc of America Securities upgraded industrial manufacturing giant 3M to neutral from underperforming on Tuesday. 3M avoided a lawsuit in June in the settlement of a lawsuit over municipal drinking water containing PFAS, or “chemicals forever.” The settlement, which ranged from $10.5 billion to $12.5 billion, was below expectations and the stock performed well after initial settlement announcements, BofA wrote in a research note.
Additionally, 3M’s restructuring plans are currently “undervalued” and the health care fallout expected later this year or early 2024 should unlock value and provide positive near-term catalysts, said BofA.
The company maintained its price target of $110 on the stock – 10% above the level where the stock closed on Monday. However, Wells Fargo and Citi both lowered their price targets on MMM shares on Monday.
Wells Fargo cut its target from $110 to $100, but maintained its equal weighting on stocks. In a research note, Wells Fargo said it sees modest upside risk to second-quarter earnings per share and expects modest guidance revisions amid higher valuations, which poses a tougher setup for the quarter.
Citi wrote that demand trends for U.S. industrials are “still sustainable” and should support relatively strong results compared to expectations. But Citi thinks most companies will remain cautiously optimistic about expectations in the second half due to mixed economic trends and tougher year-over-year growth comparisons to 2022. Citi lowered its target to priced at $100 versus $120 and maintained a neutral rating on equities.
MMM stock rose 2% early Tuesday. Shares are down 19% since the start of the year.
Disney Stock
Meanwhile, Needham said Tuesday he believes Disney will be acquired within the next three years, CNBC’s Carl Quintanilla tweeted. Needham said Disney has the best assets in the media business, doesn’t have a majority shareholder to block a takeover, and doesn’t have a permanent CEO or CFO who has a conflicting agenda with public shareholders. according to Quintanilla.
Longtime CEO Bob Iger returned to lead media giant Dow Jones in November for a two-year term to lead the company and lead the search for a new leader.
Rosenblatt also lowered his price target on DIS shares to $111 from $118 early Tuesday, but maintained a buy rating on the stock. “This is shaping up to be a tough time for Disney,” the firm wrote in a research note. And while Rosenblatt cut its estimates, the company said Disney’s asset value “is significant and appears likely to be realized, one way or another.”
Disney stock edged up 0.9% at Tuesday’s open. It eased by 1.4% in 2023.
You can follow Harrison Miller for more stock info and updates on Twitter. @IBD_Harrison
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