Here's Why 3M Stock Crushed the Market Today

Shares of 3M (NYSE: MMM) rose by 8% before 11 a.m. on Tuesday as the market digested an impressive first-quarter earnings report.

An excellent quarter for 3M

Sales came in at the high end of the intra-quarter adjustments to management's outlook given in March, and margins and profits were significantly higher than the previous outlook.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

On the earnings call in January, the company told investors to expect first-quarter sales similar to that of the fourth quarter and adjusted earnings per share (EPS) similar to that of the first quarter of 2024. Investors were initially expecting organic sales growth of 2.1% in the first quarter, accompanied by EPS of $1.71.

However, investors were disappointed in March when CEO Bill Brown told them sales were tracking closer to 1% to 1.5% due to the impact of tariffs slowing revenue growth. On a more positive note, he told investors to expect better earnings.

Today, the 1.5% organic sales growth gave confidence. However, the real reason for the stock price surge is the better-than-expected profit margin, leading to a 10% increase in EPS to $1.88.

Image source: Getty Images.

Why 3M's run can continue

Management maintained its underlying full-year adjusted EPS guidance of $7.60 to $7.90 but referred to "additional tariff sensitivity," which could reduce EPS by $0.20 to $0.40.

In addition, Brown's efforts in margin and operational improvements are bearing fruit with new product introductions (NPI) up 60% in the quarter. The company's on-time in-full (OTIF) delivery rate also improved again on a sequential basis -- NPI and OTIF are key operational targets for Brown.

If 3M can get a little help from the economy and tariffs, then there's possibly some upside potential to its guidance for the full year, especially as the first quarter beat expectations so handily.

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

Before you buy stock in 3M, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and 3M wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 3M. The Motley Fool has a disclosure policy.