3M Co.'s stock reached an all-time high Wednesday as investors awaited fourth-quarter results due Thursday.
The Maplewood-based conglomerate struck $99.67 a share by midafternoon Wednesday before closing at $99.49. The stock has climbed 16 percent in the last year, silencing naysayers who worried that economic woes abroad could thwart a surge in the company's share price.
Instead, analysts said investors were impressed that 3M recently reset earnings expectations to more reasonable levels. As a result, many are now looking ahead and betting on more achievable results for the second half of 2013. Others believe 3M could benefit from the weakening U.S. dollar, which typically makes prices of U.S. products cheaper abroad, analysts said.
3M, the $30 billion maker of Scotch tape, Post-it Notes, respirators, adhesives and thousands of other products, generates about 66 percent of its sales outside the United States.
The last time 3M's stock traded near $100 a share was in July 2011, when it hit $97.97 a share. The recent bullrun in price comes despite 3M's restrained guidance reports over the last few months.
In October, 3M dialed back its 2012 guidance noting that the economy in Europe and Asia has slowed. Last month, officials issued a guidance for 2013 that failed to meet the midpoint of analysts' average expectations.
Regardless, "We have seen a very nice rally across large cap industrials. 3M and the group as a whole has attracted buying interest since November," said Ajay Kejriwal, a research analyst at FBR Capital Markets. 3M's recent surge, "is not as much about the fourth quarter as it has to do with the first half of the year."
Last month CEO Inge Thulin forecast sales growth of 2 to 5 percent and 2013 earnings growth of 8 percent to between $6.70 and $6.95 a share.
While the low point of the new earnings range was shy of analysts' average estimate of $6.85 per share , it seemed more realistic and achievable, Kejriwal said, adding that investors liked the certainty.
In a note to investors Wednesday, Selerity Research analyst Brendan Gilmartin wrote "3M shares have been breaking out over recent weeks, benefiting from an improving global economic backdrop, current tailwinds, a rich dividend yield, and solid outlook for the balance of the year."
The consensus estimates among Wall Street analysts is that 3M will report fourth quarter earnings Thursday of $1.36 to $1.45 a share, for a midpoint of $1.41 a share.
An earnings report at the high end of estimates would push 3M shares even higher, Gilmartin said. However, "a tepid earnings release could drag the shares back toward $95."
However, some analysts said 3M's stock price has already factored in the potential for a strong fourth quarter showing, leaving little room for further stock acceleration.
In a research note to investors last month, Deutsche Bank research analyst David Begleiter said set his price target for 3M's stock at $100 a share, but kept his "hold" rating on 3M's stock.
Dee DePass • 612-673-7725