Investors of 3M (NYSE:MMM) stock are abuzz ahead of its healthcare-centric spinoff hitting the markets on April 1. Indeed, the manufacturing giant is just weeks away from completing the public launch of its healthcare business, Solventum.
It has been a quick turnaround for 3M, which only approved the new spinoff earlier this March. Solventum is set to trade on the New York Stock Exchange under the SOLV stock ticker on April 1.
Interestingly, current MMM stock shareholders will get a distribution of one share of Solventum for every four shares of 3M they own as of the record date, March 18. This means that buying shares of 3M between now and April 1 won’t guarantee you a distribution of SOLV.
3M is best known for its long line of industrial, health and consumer goods. Its healthcare branch specifically has been notoriously fast-growing over the past several years.
MMM stock itself hasn’t been particularly lively ahead of the Solventum launch. Indeed, MMM is actually down about 1.2% year-to-date (YTD), even as the S&P 500 is up nearly 11% over the same period.
Analysts Divided on MMM Stock Ahead of Spinoff
While some view 3M’s impending spinoff as a clear buy sign, others believe that the stock may be liable to tumble in the aftermath of the launch.
Indeed, Matt DiLallo of the Motley Fool believes those interested in Solventum stock may want to simply wait for the spinoff rather than try to get a distribution beforehand.
This is because spinoffs have a habit of trading for lower prices as investors sell off shares of a company they have little interest in holding. DiLallo cites Johnson & Johnson’s (NYSE:JNJ) health-product spinoff, Kenvue (NYSE:KVUE), which has shed about 20% of value since its separation.
On the other hand, Barclays analyst Julian Mitchell recently upgraded MMM stock from a “hold” rating to a “buy” rating. The analyst also raised his price target to $126 per share from $111.
“We now see a more attractive risk/reward than we did in late 2023 as well as an increased range of potential catalysts ahead, to drive a re-rating higher of 3M’s very low valuation,” Mitchell noted.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
