A JPMorgan Chase analyst recently raised their price target on industrial conglomerate 3M (NYSE: MMM) by $10 to $118, a figure representing a roughly 27% premium to the current price. However, the analyst fell short of giving 3M a "buy" rating and stuck with a "neutral" rating.

The analyst's arguments revolve around 3M's margin expansion initiatives through cost-cutting actions and strong cash generation in 2023. As a reminder, 3M plans to cut $700 million to $900 million in costs by the end of 2025 (with the actions taken to achieve them finished by the end of 2024), while taking $700 million to $900 million in charges along the way. The company's adjusted free cash flow (FCF) came in at an impressive $6.3 billion in 2023, easily surpassing adjusted net income of $5.1 billion.

For 2024, management expects adjusted earnings per share in the range of $9.35 to $9.75 and adjusted FCF within 5 percentage points higher or lower. At the midpoint of guidance, 3M should generate about $9.55 in FCF per share. That means the stock is trading for a little under 10 times this year's estimates.

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Source Fool.com