3M (MMM) Stock Price Drivers

Stock Price Drivers 3M is a global industrail conglomerate with diversified operations and a broad range of products that cater to consumers in hundreds of different markets. The company's performance is also correlated to the US GDP by a factor of 0.88. Current forecasts put GDP growth at a tepid 2-3% for the next year, which should nonetheless have a positive impact on 3M's earnings. 3M EPS vs. US GDP зм US GDP (in $ billion) $1,650 $1,600 $1,550 $1,500 $1,450 $1,400 $6.5 $6.0 $5.5 $5.0 $4.5 $1,350 $4.0 $1,300 $1,250 $1,200 $3.5 $3.0 2005 2006 2007 2008 2009 2010 2011 2012 3M's earnings per share (EPS) are correlated to US corporate profits by a factor of 0.8,because the demand for its products is generated by large corporations and from the customers they serve as well. US Corporate Profits vs. 3M EPS Corp. Profits (millions) $6 $2,000 $4 $1,500 $2 $0 $1,000 2005 2006 2007 2008 2009 2010 2011 2012 3M's Industrial and Transportation segment accounted for 34% of the company's revenues in 2012. The segment provides solutions to designers, manufacturers, and original equipment manufacturers in the automotive industry, whose revenues depend upon the number of cars produced and sold in the US market. For this reason, 3M's EPS is correlated to vehicle production by a factor of 0.47. US Vehicle Production vs. 3M EPS Vehicle Production (Percentage Change)- US Eps 12% $7.0 10% $6.5 8% $6.0 6% $5.5 4% $5.0 2% $4.5 0% $4.0 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Chemical Production vs 3m EPS (%Change) Specialty Chemicals Production Growth Basic Chemicals EPS Growth Rates Production Growth 3M Growth 40% 0.4% 20% -0.1% 0% -0.6% -20% -1.1% 2012 2011 2010 2009 2008 2007 3M's EPS is also correlated to growth in the production of basic chemicals by a factor of 0.85. Growth in the production of specialty chemicals is similarly correlated to 3M's EPS by a factor of 0.45. This indicates 3M's heavy reliance on revenues from the Industrial and Transportation segment, as the segment supplies a range of products to the global oil and gas industry and other related industries as well. SOURCES: BIDNESS Company Data, SEC filings, Bloomberg Professional Services etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc.