Earnings Preview: It's Time for 3M to Step Up

Industrial giant 3M (NYSE: MMM) will release its fourth-quarter 2021 results on Jan. 25 in what is likely to prove to be a pivotal year. To understand why and what 2022 might have in store for the company, you have to look back at what's happened in the last few years. Either 3M is a value stock about to engineer a significant turnaround in its stock's fortunes, or it's a company needing a fundamental restructuring. The potential outcomes are that polarized. Here's the lowdown.

3M stock used to command a valuation premium compared to much of the industrial conglomerate sector. As you can see below, that premium has disappeared in recent years, and now the stock trades at a discount. For reference, EV is enterprise value (market cap plus net debt), and EBITDA is earnings before interest, taxes, depreciation, and amortization. It's an excellent way to compare companies with different debt loads.