J.P. Morgan Securities downgraded the stock to “neutral” from “overweight”
The shares of 3M Co (NYSE:MMM) are off 1.6% at $173.95 after J.P. Morgan Securities downgraded the Dow member to “neutral” from “overweight,” and slashed its price target to $210 from $215. The analyst said 3M lacks “fundamental direction,” adding that it sees minimal progress on the firm’s liability management and business execution.
J.P. Morgan Securities also warned against MMM’s underperformance, and with good reason. The stock has been in a downward trend since mid-August after spending months consolidating under the $204 area. By mid- September, the equity breached the formerly supportive 200-day moving average, while pressure at the 20-day moving average has helped guide 3M stock lower in recent months. The security still sports an 11.3% year-over-year lead, but looks ready to drop below its year-to-date breakeven today.
J.P. Morgan Securities joins a cautious brokerage bunch. Heading into today, just two in coverage called MMM a “strong buy,” while six said “hold,” and three said “sell” or worse. Meanwhile, the 12-monnth consensus price target of $197.54 is an 11.8% premium to last night’s close.
Options traders have also taken a bearish stance. The security’s Schaeffer’s put/call open interest ratio (SOIR) of 1.17 stands higher than 97% of readings from the past 12 months. This implies short-term options traders have been much more interested in puts of late.
Echoing this, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 3M stock sports a 50-day put/call volume ratio that ranks in the 86th percentile of its annual range. In other words, long puts are being picked up at an unusually fast clip.