Is 3M Stock (NYSE:MMM) Shaping for Breakout Ahead of Earnings? What To Expect

3M Company's stock (NYSE: MMM) is trading at $154.78 ahead of the company's highly anticipated third-quarter 2025 earnings announcement, scheduled this morning, before the market opens. With a gain of 1.4% during the most recent session extending the YTD performance to 19.34%, the question now is whether 3M can deliver the results needed to sustain this rally and potentially trigger a breakout above the stubborn $160 resistance?

The current trading activity suggests a growing confidence in 3M's near-term prospects. Price action is further supported by the stock's technical indicators. 3M's 50-day simple moving average (SMA) sits at $154.35, while the 200-day SMA is $147.18. The fact that the current price is above both of these averages suggests a positive trend, with the 50-day SMA potentially acting as a near-term support level.

Analysts are projecting earnings per share (EPS) of $2.07 and revenue of approximately $6.25 billion for the third quarter. These expectations follow a strong second quarter, where 3M reported adjusted EPS of $2.16, a 12% increase year-over-year. The company also raised its full-year EPS guidance to a range of $7.75 to $8.00, fueled by a 1.5% increase in organic sales and a notable 290 basis point improvement in operating margins. 

3M's commitment to enhancing shareholder value has played a crucial role in bolstering investor sentiment. In February, the company unveiled plans to return at least $10 billion in cash to shareholders, demonstrating its financial strength and commitment to rewarding its investors.

Additionally, 3M outlined its strategic objective of achieving an operating margin of approximately 25% by 2027. This ambitious target underscores the company's focus on improving operational efficiency and profitability.

The restructuring initiatives spearheaded by CEO Bill Brown have also contributed to the company's positive trajectory. These initiatives are aimed at fostering innovation by developing new products and redirecting spending away from areas such as legal liabilities and supply-chain costs. 

However, whilst the consensus leans towards a positive outlook, the bears might argue that the market is already pricing in much of the potential good news. The restructuring benefits, while promising, may take longer to materialize than anticipated.

Moreover, the easing of U.S.-China trade tensions could be temporary, and renewed trade disputes could negatively impact 3M's bottom line. Furthermore, the legal liabilities remain a significant overhang, and any adverse rulings could quickly erode investor confidence, regardless of the company's operational performance. The projected EPS of $2.07 may be difficult to achieve if the company is facing unexpected headwinds, and a miss could trigger a  correction in the stock. 

While the current momentum suggests a potential breakout could be on the cards, the stock is clearly meeting some resistance around this level, and its performance in the upcoming quarter could be a key factor in what happens from here.