The shares of 3M Company (MMM) should be in focus today, after the company affirmed its fiscal 2011 earnings outlook and issued guidance for fiscal 2012. For the current year, the Dow Jones Industrial Average powerhouse said it sees earnings in a range of $5.85 to $5.95 per share, surrounding Wall Street‘s expectations for earnings of $5.93 per share.
For 2012, 3M expects earnings in a range of $6.25 to $6.50 per share, on sales of $30.2 billion to $31.5 billion. Analysts are currently expecting fiscal 2012 earnings of $6.31 per share on revenue of $30.59 billion.
Analysts were largely divided heading into this morning’s announcement. According to data from Thomson/Reuters, only nine of the 19 analysts following MMM rate the shares a Buy or better, compared to eight Holds and two Sells. What’s more, the ratings trend appears to be bearish for the stock, as MMM sported 12 Buys, five Holds, and two Sells last month.
Additionally, MMM’s consensus 12-month price target rests at $90. In other words, Wall Street analysts are only forecasting an upside of 12.5% during the next 12 months for 3M shares.
There is also a decided lack of optimism from the options crowd as well. Overall, MMM has attracted total call open interest of 130,504 contracts, compared to put open interest of 125,272 contracts. The result is a very noncommittal total put/call open interest ratio of 0.96, meaning that calls and puts are practically in parity for all open MMM strikes.
On Monday, MMM saw a skew toward the bearish end of the spectrum in the options pits. Specifically, 9,785 puts traded on the stock, versus call volume of just 7,516 contracts. That said, with this morning’s positive fundamental data, we could see a reversal of this trend.
Technically speaking, MMM had ground slowly higher since setting a fresh 52-week low of $68.83 on Oct. 4. However, while the shares have managed to push past former resistance at their 50-day moving average, they have not strayed far from this long-term trendline. In fact, MMM has been content to sidle between this supportive moving average, even as its 200-day trendline descends into the region. Should MMM breakout above the longer of these two moving averages, it could be a sign of additional gains, as investors and analysts finally capitulate to the uptrend.
Daily MMM chart with 50-day and 200-day moving averages
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