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Buy Alert For $2 Coin (Ad)pixel
Judge rejects Justice Dept.'s bid to stop sugar merger
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S&P 500   3,693.23
DOW   29,590.41
QQQ   275.51
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Buy Alert For $2 Coin (Ad)pixel
Judge rejects Justice Dept.'s bid to stop sugar merger
Will Wall Street's Enthusiasm About Datadog Lead To Big Gains?
Buy Alert For $2 Coin (Ad)pixel
MarketBeat: Week in Review 9/19 – 9/23
China using civilian ships to enhance navy capability, reach
Cash Holders STILL Aren’t Taking Steps to Prepare (Ad)pixel
German leader seeks energy deals, alliances on Gulf trip
World Bank head says he's not a climate denier, won't quit
S&P 500   3,693.23
DOW   29,590.41
QQQ   275.51
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Buy Alert For $2 Coin (Ad)pixel
Judge rejects Justice Dept.'s bid to stop sugar merger
Will Wall Street's Enthusiasm About Datadog Lead To Big Gains?
Buy Alert For $2 Coin (Ad)pixel
MarketBeat: Week in Review 9/19 – 9/23
China using civilian ships to enhance navy capability, reach
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German leader seeks energy deals, alliances on Gulf trip
World Bank head says he's not a climate denier, won't quit

Are 3M, Honeywell, GE Buys After Quarterly Reports?

Are 3M, Honeywell, GE Buys After Quarterly Reports?Industrials 3M (NYSE: MMM), Honeywell (NASDAQ: HON) and General Electric (NYSE: GE) are all trading higher following recent earnings reports.

One truism about the industrial sector: These companies’ businesses are intricately tied to economic cycles. We maybe familiar with the consumer products offered by these companies, such as 3M’s Post-It notes, Honeywell’s air purifiers and humidifiers, and GE’s light bulbs. 

However, all these companies also have large exposure to business and enterprise customers. That means they feel the effects of cyclical demand as the economy rises and falls, and businesses and manufacturers expand and contract their buying. 

Despite widespread worries about recession, the broader industrial sector, as tracked by the Industrial Select Sector SPDR ETF (NYSEARCA: XLI), is down 8.49% year-to-date, but it’s participated in the recent broad market rally, showing a one-month gain of 9.30%.

The most heavily weighted components within the sector, and their one-month returns are:  

3M, which constitutes 3.08% of sector weighting,  reported quarterly results on July 26, and the stock has been on a tear since then. Earnings came in at $2.48 per share, a 10% year-over-year decrease. Revenue was $8.7 billion, a decrease of 3%. That marked the second quarter in a row of declining earnings. On the revenue side, 3M saw zero revenue growth in the two previous quarters.


The stock has returned a whopping 15.35% in the past month. 

So what’s the upside here? Why is the stock on the rise? 

The company announced a spinoff of its health care technology business focused on wound care, oral care, healthcare IT, and biopharma filtration. It expects the tax-free transaction expected to be completed by year-end 2023. It previously announced a split-off transaction of its food safety business, with a targeted closing date of September 1, 2022.

Spinoffs can create shareholder value by allowing two different companies to focus on their core businesses. In this case, the new 3M expects to retain a stake of 19.9% in Health Care, which it says will be monetized over time. 
3M, Honeywell, GE Trade Higher After Quarterly Reports

Meanwhile, Honeywell reported earnings of $2.10 per share on July 28, topping views by $0.07 per share. Revenue came in at $8.95 billion, also ahead of views, according to MarketBeat earnings data. 

The company topped earnings expectations in every quarter since October 2017, when it met views.

Honeywell’s aerospace sales rose, as airline travel bounced back. In addition, its business unit serving the oil-and-gas industry also saw strong revenue. 

MarketBeat analyst data reveal that Wall Street has a “moderate buy” rating on Honeywell, with a price target of $210.08, an 8.09% upside.

In the past month, Honeywell shares are up 11.90%. The stock remains below its 200-day moving average, but above its 50-day line. When the longer-term average is above the shorter term, it can signal that an uptrend may weaken and fail. However, at some point trends reverse.  There’s a slight move higher in the 50-day line which might possibly indicate a more sustained rally, although it’s way too soon to know that for sure.
3M, Honeywell, GE Trade Higher After Quarterly Reports

General Electric, which constitutes 3.02% of the industrials sector, reported quarterly results on July 26, and the stock has been trading higher. It boasts a one-month gain of 18.86%.

That was ahead of views by $0.40 per share. Revenue was $18.65 billion, well ahead of views calling for $17.90 billion, according to MarketBeat data.

The big news for GE is an imminent split-up into three separate companies: GE HealthCare, GE Aerospace and GE Vernova.

GE HealthCare will be listed on the Nasdaq under the ticker GEHC. It’s expected to begin trading in early 2023. 

GE Aerospace include company’s aviation business unit. The plan is to expand beyond the engines it’s known for. That spinoff is expected to be completed in 2024, and this company is expected to retain the traditional GE ticker. 

GE Vernova will consist of the company’s portfolio of energy businesses. The company has not revealed the ticker for this business unit. 

Should you buy a stock ahead of a split-up that’s already been announced? While some analysts see attractive upside in the trio of companies, seven analysts have slashed their price targets on GE since the end of April, MarketBeat analyst data reveal
3M, Honeywell, GE Trade Higher After Quarterly Reports

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
3M (MMM)
2.5894 of 5 stars
$112.99-1.0%5.27%15.78Hold$147.43
General Electric (GE)
2.7425 of 5 stars
$64.55-1.2%0.50%-15.22Moderate Buy$99.15
United Parcel Service (UPS)
3.0495 of 5 stars
$164.33-2.1%3.70%13.20Moderate Buy$215.11
Union Pacific (UNP)
2.8615 of 5 stars
$203.97-2.5%2.55%19.01Hold$247.22
Raytheon Technologies (RTX)
3.1117 of 5 stars
$82.03-1.7%2.68%27.43Moderate Buy$114.10
Industrial Select Sector SPDR Fund (XLI)N/A$84.75-1.9%1.79%N/AN/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in 3M right now?

Before you consider 3M, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and 3M wasn't on the list.

While 3M currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Kate Stalter

About Kate Stalter

Contributing Author: Retirement, Asset Allocation, and Tax Strategies

Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies. Kate also serves as a capital-markets contributor at Forbes.com, and is an expert columnist for the investment advisory channel at U.S. News & World Report.
Contact Kate Stalter via email at stalterkate@gmail.com.
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