3M Stock Jumps on Healthcare Spin Off

The company reported upbeat second-quarter results, too

Deputy Editor
Jul 26, 2022 at 10:40 AM
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The shares of Dow member 3M Co (NYSE:MMM) are up 5.4% to trade at $141.32 -- earlier as high as $145.70 -- after news that the industrial giant will spin off its healthcare business into a new publicly traded company. 3M also announced strong second-quarter results, and separately, its Aearo Technologies unit, which is facing multiple claims of defective earplugs, filed for bankruptcy protection. 

Today's pop has MMM shooting above the $135 level, which has kept a tight lid on gains for a little over a month. It also removes the stock further from its July 5 two-year low of $125.60. Year-to-date, the equity is down 20.5%. 

Analysts are wholeheartedly bearish toward 3M stock, with 10 of the 15 in coverage carrying a tepid "hold" rating and five a "sell" or worse. Plus, the 12-month consensus price target of $144.07 is just a slim 1.6% premium to current levels. 

Options traders are similarly pessimistic. The security's 50-day put/call volume ratio of 1.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than all other readings from the past year, meaning puts have been picked up at their fastest rate in 12 months. 

Looking closer at today's options activity, 9,722 calls and 7,396 puts have crossed the tape, with overall volume running at seven times what's typically seen. The weekly 7/29 40-strike put is the most popular, with new positions being opened here. 

 

 

 

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