Shares of 3M Co. kept sinking Friday, toward the lowest close in years, after Wall Street’s most bearish analyst got even more bearish, citing the company’s overly optimistic growth outlook at a time of very high inventory levels.
Analyst Stephen Tusa at J.P. Morgan reiterated the underweight rating he’s had on 3M since September 2017, but slashed his price target to $143 from $154, as the company’s challenges appear to be more than just cyclical in nature. His new target is more than 15% below current levels, and is by far the lowest of the 18 analysts surveyed by FactSet; the next lowest target is $174.
The stock MMM, -1.16% dropped 1.1% in midday trade, paring earlier losses of as much as 2% to the lowest intraday level seen since Nov. 9, 2016. It has now plunged 22.5% since the industrial, health-care and consumer products company reported disappointing first-quarter results, slashed its full-year outlook and said it was cutting 2,000 jobs.
The company, whose products include Post-it notes, Scotch tape and Ace bandages, has lost $28.4 billion in market capitalization since reporting results April 25. During that time, the stock’s price decline has shaved about 334 points off the Dow Jones Industrial Average’s DJIA, +0.09% price, which has lost 710 points, or 2.7%, over the same time.
Tusa questioned the company’s financial guidance, which calls for acceleration in the second half of the year mostly in auto electronics and related to China, and says that he is “even more cautious” on the sector after visiting last week. That’s not to mention all the uncertainty regarding the contentious U.S.-China trade relationship, and the downward adjustment that will likely be needed when the acquisition of Acelity Inc. is