3M Co (NYSE:MMM) has provided an upbeat assessment of its second quarter performance and demand trends during investor meetings last week, ahead of the release of its report for the period on July 28, according to Bank of America analysts.
Bank of America wrote that the company expressed a constructive view on the second quarter and the remainder of the year, supported by continued order strength and higher backlog levels.
According to the bank, backlog coverage has risen to roughly 27% to 29% of the next quarter's sales, compared with a more typical range of 23% to 24%.
The bank wrote that 3M expects second-quarter organic sales growth to be "solidly" above 3%, noting that sustained order momentum suggests there was limited customer pre-buying in the first quarter.
Demand conditions vary across the company's businesses. Bank of America wrote that 3M Co (NYSE:MMM)ntinues to see strength in its Safety & Industrial Business Group, aided by pricing actions and internal execution, while roofing granules and auto aftermarket markets remain weak.
In the Transportation & Electronics Business Group, weakness in automotive and consumer electronics markets is being offset by growth in data centers, semiconductors and aerospace and defense applications. Consumer point-of-sale trends are stabilizing but remain soft overall.
Bank of America said 3M's margin outlook remains supported by productivity initiatives and price-cost discipline, with additional tailwinds expected through 2027. Based on current pricing and cost dynamics, the company no longer expects to use a previously discussed contingency worth $0.05 to $0.15 per share.
The bank also highlighted growth opportunities tied to 3M's optical intellectual property portfolio, noting that the company has increased its estimate for the total addressable market to $2 billion from $1 billion cited during its first-quarter earnings report.
Following the meetings, Bank of America reiterated its ‘Buy’ rating on 3M and raised its 2026 earnings per share estimate by $0.10 to $8.80.
The bank’s analysts also increased its second-quarter EPS forecast by $0.02 to $2.28, reflecting an expectation for 4.0% organic growth, up from a previous estimate of 3.2%.