EARN25

3M Stock Pops on Potential $5.5 Billion Settlement

The Dow member is hoping to avert larger liability

Deputy Editor
Aug 28, 2023 at 9:37 AM
facebook X logo linkedin


The shares of Dow member 3M Co (NYSE:MMM) are up 5.7% at $104.58 at last check, following news the industrial giant will settle more than 300,000 lawsuits pertaining to its earplugs. The company allegedly sold defective combat earplugs to the U.S. military, and the tentative settlement will amount to over $5.5 billion.

Today's pop is likely due to the fact that the settlement skirts the possibility of even larger liability. MMM cleared the $102 level as well as its 50-day moving average, both of which have enacted pressured since mid-August. Over the last 12 months, 3M stock is down more than 23%.

Coming into today, analysts were firmly bearish toward the security, with all but one of 14 in coverage carrying a tepid "hold" or worse rating. Conversely, options traders are optimistic, per MMM's 50-day call/put volume ratio of 1.96 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks higher than 99% of readings from the past year.

Those looking to weigh on 3M stock's next moves should consider options. The security's Schaeffer's Volatility Index (SVI) of 21% sits higher than just 9% of readings from the past 12 months. This implies these traders are pricing in low volatility expectations. 

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!