UPDATE: Morgan Stanley Downgrades 3M Co. to Underweight, Lowers PT on Increasing Negative Outlook

In a report published Monday, Morgan Stanley analyst Nigel Coe downgraded the rating on 3M Co. MMM from Equal-Weight to Underweight, and lowered the price target from $123.00 to $122.00. In the report, Morgan Stanley noted, “Attractive end market footprint. MMM has the most global sales mix in the group with defendable market position. However, 3M tends to show below-average core growth in cyclical upswings. As such, we expect the company to underperform EE/MI peers over the next two years, as we enter the reacceleration phase of this mid cycle slowdown, Limited operating leverage, with margins at peakish levels. This is endorsed by management's commitment to reinvest productivity and other OM benefits. We see risk of multiple compression, given the outlook for below average earnings growth through the balance of this cycle.” 3M Co. closed on Friday at $133.51.