Investors are positioning for 3M's second-quarter results next week as expectations build that artificial intelligence-linked demand is supporting the industrial group's growth. JPMorgan turns more positive on the stock before Tuesday's report, citing stronger data center and semiconductor exposure and resilient demand for core consumer products in the U.S.
Highlights
- JPMorgan upgrades 3M to overweight from neutral, raising its price target to $180 from $178, implying 11% upside from Thursday's close.
- JPMorgan cites growth in 3M driven by AI and data-center demand, expecting $2.26 adjusted EPS versus consensus of $2.24 for Q2 earnings.
- 3M gains traction in mainstream markets and maintains pricing power as sales in data centers and semiconductors offset weaker electronics and automotive demand.
Upgrade rationale before Tuesday results
As reported by CNBC, JPMorgan upgrades 3M to overweight from neutral ahead of the company's second-quarter earnings release and raises its price target to $180 from $178. The bank says the new target implies 11% upside from Thursday's close.Analyst Chigusa Katoku says growth is beginning to take hold at 3M, helped by supportive short-cycle indicators and broader demand tied to AI and data centers. JPMorgan expects adjusted earnings of $2.26 per share, slightly above the broader analyst consensus of $2.24 per share.
Katoku says sales linked to data centers and semiconductors are offsetting weaker demand in consumer electronics and autos. She also says 3M is gaining traction in mainstream markets and maintaining pricing power as inflation eases.
Market positioning and industry implications
3M is due to report second-quarter figures on Tuesday, making the upgrade a closely watched signal for investors tracking whether AI-driven industrial demand is spreading beyond the most obvious technology beneficiaries. The call also suggests that parts of the diversified industrial sector could see earnings support from infrastructure tied to computing and chip production.Wall Street remains divided on the stock. According to LSEG, nine analysts rate 3M a buy or strong buy, while eight have hold ratings and two rate the shares as underperform or sell.
In our earlier article on AI data center construction boosting demand for power, cooling and mechanical systems, we highlighted Comfort Systems (FIX) as a notable beneficiary of the buildout. We explained that the company’s roughly $12 billion backlog and strong earnings momentum reflect growing AI-linked project work alongside resilient demand from hospitals, schools and commercial buildings.
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