3M Stock Sliding After RBC Downgrade

By Karee Venema / July 09, 2019 / www.schaeffersresearch.com / Article Link

AnalystsThe brokerage firm cited an "unquantifiable risk" for the blue chip

RBC downgraded 3M Co (NYSE:MMM) to "sector perform" from "outperform," and slashed its price target by $31 to $176. The brokerage firm called several guidance cuts in recent quarters "unsettling," and tapped legal issues surrounding PFAS contamination as an "unquantifiable risk."

This skepticism toward 3M stock is shared by other members of the brokerage bunch, with all nine in coverage maintaining a "hold" or worse recommendation. Plus, the average 12-month price target of $179.44 is a slim 6% premium to last night's close at $169.19.

Options traders, on the other hand, have been unusually bullish toward the Dow stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MMM's 50-day call/put volume ratio of 1.96 ranks in the 100th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Drilling down, the July 200 strike is home to peak call open interest, and data from the major options exchanges confirms significant buy-to-open activity here. In other words, call buyers are betting on a breakout above $200 by front-month options expiration at the close next Friday, July 19.

The last time MMM shares closed a week above $200 was in late April -- just ahead of a massive post-earnings bear gap. More recently, the stock's rally off its early June three-year low of $159.37 was contained by its descending 50-day moving average. Today, 3M stock is down 1.9% at $165.95 in early trading. Should the equity fail to bounce back above $200 by next Friday's close, the most those call buyers stand to lose is the initial premium paid.

Recent News

Platinum, palladium, copper gain on green China, supply constraints

September 29, 2025 / www.canadianminingreport.com

Gold stocks continue to soar as markets stumble

September 29, 2025 / www.canadianminingreport.com

Gold stocks again reach new highs

September 22, 2025 / www.canadianminingreport.com

Silver outpaces major metals in recent months

September 22, 2025 / www.canadianminingreport.com

Another 'Bubble Check' for the gold sector

September 08, 2025 / www.canadianminingreport.com
See all >
Share to Youtube Share to Facebook Facebook Share to Linkedin Share to Twitter Twitter Share to Tiktok