3M "buy," target price reduced

23.10.07 - Deutsche Securities

NEW YORK, October 23 (newratings.com) - Analysts at Deutsche Bank Securities maintain their "buy" rating on 3M Company (MMM). The target price has been reduced from $110 to $105.

In a research note published yesterday, the analysts mention that 3M?s share price declined by 9% on Friday after the company announced its plans to significantly reduce Optical Film (OF) prices next year due to stiff competition, which would result in sharp contraction in OF margins over the next 18 months. Despite the expected margin contraction, 3M is likely to generate almost 10% EPS growth in 2008 due to improvements in the supply chain, international growth and a reinvigorated research and development pipeline, the analysts say.