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Why A Democratic Congress Is Turning This 3M Analyst Bearish

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Why A Democratic Congress Is Turning This 3M Analyst Bearish

3M Co (NYSE: MMM) faces heightened PFAS risks with Democrats taking control of the U.S. Senate, according to BofA Securities.

The 3M Analyst: Andrew Obin downgraded 3M from Neutral to Underperform and reduced the price target from $200 to $170.

The 3M Thesis: The Republicans prevented major PFAS —  perfluoroalkyl and polyfluoroalkyl substances — legislation from being passed under the Trump administration, Obin said in the downgrade note.

“We believe Democratic control of the relevant Senate Committee and the EPA will accelerate legislation and regulation around PFAS contamination,” the analyst said.

“Passage of relevant legislation could significantly shape PFAS cleanup and 3M’s financial liability over the next several years,” he said. 

A previous analysis estimated 3M’s total pre-tax liability at around $9 billion, which includes cleanup costs and personal injury liability, Obin said.

“Negative headlines and incremental lawsuits associated with legislative and EPA actions are likely to drive de-rating of 3M shares.”  

MMM Price Action: Shares of 3M were trading down 3.23% at $168.49 at last check Thursday. 

Latest Ratings for MMM

DateFirmActionFromTo
Jan 2021Morgan StanleyMaintainsEqual-Weight
Jan 2021B of A SecuritiesDowngradesNeutralUnderperform
Oct 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for MMM
View the Latest Analyst Ratings

 

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Posted-In: Andrew Obin BofA SecuritiesAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
UNPMorgan StanleyMaintains170.0
TKRMorgan StanleyMaintains90.0
TFCMorgan StanleyMaintains64.0
TEXMorgan StanleyMaintains42.0
SUMMorgan StanleyMaintains24.0
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