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Is 3M (MMM) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

3M (MMM - Free Report) is a stock many investors are watching right now. MMM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.06, while its industry has an average P/E of 19.40. MMM's Forward P/E has been as high as 13.84 and as low as 8.97, with a median of 11.31, all within the past year.

Investors will also notice that MMM has a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MMM's PEG compares to its industry's average PEG of 1.75. Within the past year, MMM's PEG has been as high as 1.65 and as low as 1.09, with a median of 1.27.

These figures are just a handful of the metrics value investors tend to look at, but they help show that 3M is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MMM feels like a great value stock at the moment.


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