3M Company (MMM) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: 3M Company

Updated on October 21, 2026 · accounts published on October 20, 2026

Reading of October 20, 2026: A still-profitable industrial with shrinking earnings and weak cash conversion

3M trades at a P/E of 30.4 over the last 12 months, 70 % above its ten-year median of 17.9 and higher than 99 % of the past decade.

• Is 3M expensive or cheap? 3M's P/E of 30.4 is 70 % above its ten-year median and 18 % above the sector median of 25.8.
• How is the business doing? Revenue grew 1.5 % over the last 12 months while EPS fell 20.5 %, and the 18.7 % operating margin trails its 20.5 % average.
• How strong is the balance sheet? Net debt was 1.3× EBITDA in fiscal 2025, well under the sector's 3.0× limit, and the dividend yields 1.8 %.
• What to expect from the next earnings? Analysts expect EPS of $2.03 for the quarter reported on January 19, 2027; 3M has beaten estimates in 8 straight quarters.
• Does 3M turn its margin into cash, and at what multiple of the cycle? Only 43 % of fiscal 2025 net income became free cash flow, half the 85 % an industrial needs, at an EV/EBITDA of 17.0.

Is 3M expensive or cheap?

Over the last 12 months 3M trades at a P/E of 30.4, 70 % above its ten-year median of 17.9. The stock has traded at a lower multiple 99 % of the time in the past decade. The decade range ran from 7.1 to 32.5, so today sits near the top. Against 404 sector peers, whose median P/E is 25.8, the premium is 18 %. An earnings yield of 4.9 % and a free cash flow yield of 2.1 % point the same way: buyers are paying well ahead of what the business currently earns in cash.

How is the business doing?

3M is still profitable, but momentum is weak. Over the last 12 months revenue rose 1.5 % and EPS dropped 20.5 %. Over fiscal 2020-2025, revenue per share shrank 3.5 % a year, short of the 6 % that counts as healthy for an industrial. The operating margin of 18.7 % over the last 12 months sits below its 2014-2025 average of 20.5 %. Returns hold up better: ROIC of 12.7 % is 3.7 points above the sector median of 9.0 % and topped 10 % in 8 of the last 10 fiscal years, although it falls short of the sector's 15 % bar.

How strong is the balance sheet?

Debt is manageable. Net debt was 1.3× EBITDA in fiscal 2025, comfortably inside the 3.0× ceiling for industrials. It equals $14.45 a share, 8.4 % of the current price. The Altman Z of 4.3 over the last 12 months sits in the safe zone above 2.99, and a current ratio of 1.4 covers short-term obligations. Debt to equity of 3.6 looks high because book equity is thin, which also explains a P/B of 21.3 and an ROE of 93.8 %. That return reflects leverage more than exceptional profitability. The dividend yields 1.8 % over the last 12 months and took 36 % of fiscal 2025 earnings.

What to expect from the next earnings?

3M has topped EPS estimates in each of the last 8 quarters. On October 20, 2026 it reported $2.50 against $2.38 expected, a 5.0 % beat. For the next report, due January 19, 2027, analysts expect $2.03. Over the last 30 days the full-year 2026 EPS consensus has held at $8.95 across 10 analysts, and revenue estimates have barely moved. Of 33 analysts, 16 rate the stock a buy, 16 a hold and 1 a sell. That split view leaves little room for a miss at a P/E near the top of its decade range.

Does 3M turn its margin into cash, and at what multiple of the cycle?

Industrials are semicyclical, so one year's earnings can flatter or punish the picture. That is why the sector is judged on operating margin, cash conversion and multiples measured against the cycle. 3M clears the margin test, with 18.3 % in fiscal 2025 against a 12 % healthy floor. Cash conversion is the weak point: free cash flow was 43 % of net income in fiscal 2025, against the 85 % the sector treats as healthy. Capex of 3.6 % of revenue sits just under the 4 % to 8 % range. On the cycle, EV/EBITDA of 17.0 over the last 12 months compares with a six-year average of 11.6, above the 110 % line that marks expensive.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.