The Rising Influence of Rising Affluence

[DewDiligence]

Re: 3M's 2020 guidance /today’s sell-off

3M's 2020 EPS guidance of $9.30-9.75 has to be compared with the 2019 adjusted EPS of $9.10, which excludes environmental-litigation expenses ($1.02/sh) and Venezuela-deconsolidation charges ($0.28/sh, non-cash).

On this basis, the 2020 EPS-guidance range of $9.30-$9.75 represents a 2-7% increase from 2019, which is not that bad.

Today’s 5% sell-off is based, in part, on the disclosure of a new potential environmental liability in Decatur, Alabama.

(The 19-25% increase in 2020 EPS guidance relative to 2019 GAAP EPS of $7.80 is not an apples-to-apples comparison due to the special items mentioned above.)