3M (MMM): The right type of stock for a choppy macro; self-help is bearing fruit

Following Q3 earnings, we slightly raise our EPS estimates, and our price target moves up slightly to $191. We thought the quarter was encouraging in a number of respects, especially in terms of self-help (on the top line with EBO and other NPIs, on margins despite the price/cost headwinds), and this, coupled with low investor expectations, explains the share price bounce in reaction to earnings. We continue to favor the name in the context of our relatively cautious view on the overall industrial cycle, given its relatively low cyclical "torque," high degree of self-help, and low valuation multiple. We forecast 2026/2027 adjusted EPS of $9.16/$9.94, with operating margins expanding ~80bps in 2026 and ~110bps in 2027, and assume ~3% TEBG organic sales growth in 2027, +1% Consumer OSG and a ~1% deceleration in SIBG OSG.