Street View: 3M set for a fresh start as business complexity reduces

Minco Capital

27/07/2022 14:29

** 3M Co  MMM.N  on Tuesday disclosed plans to spin off its
healthcare business into a listed company, joining a raft of
U.S. manufacturers looking to simplify their business and boost
investor returns  urn:newsml:reuters.com:*:nL4N2Z72CI
   
    BOLD MOVES 
    ** Melius Research ("hold", PT:$181) says MMM's plans to
divest its healthcare business is a smart move and a "critical
step out of the abyss"
    ** BofA Global Research ("underperform", PO:$195) says MMM's
plans to spin-off of its healthcare business and plans for a $1
bln trust to address combat arms earplugs litigation will create
shareholder value
    ** Mizuho ("neutral", PT: $130) believes co is focusing on 
what it can control and continues to reinvest in areas of
innovation and operations (e.g. digitization, streamlining)
despite headwinds
    ** "MMM is taking steps to reduce complexities, but we
expect uncertainty regarding markets and liabilities to persist,
although these steps could drive better investor engagement" -
Mizuho
    ** Credit Suisse ("neutral", PT: 160) says it is 'surprised'
to see 3M spin off its healthcare business and adds in the
current macro environment, healthcare is likely to be less
impacted from a valuation perspective
    ** RBC ("underperform", PT: $120) says MMM is late to the 
party for the sector-wide "urge to demerge" trend, suggesting 
that it is not unlocking value
    ** "The initial $1 bln funding of the trust could prove to
be woefully inadequate" - RBC

 (Reporting by Radhika Anilkumar in Bengaluru)
 ((Radhika.Anilkumar@thomsonreuters.com))