Here Is My Top Blue Chip Stock to Buy Now

Lee Samaha, The Motley Fool

Sun, Apr 27, 2025, 3:05 PM 4 min read

3M (NYSE: MMM) recently reported first-quarter earnings and demonstrated that it's making underlying progress that significantly raises the upside potential for the stock upon a resolution to the trade conflict. As such, the risk/reward calculation has moved in favor of buying stock in the multi-industry company, and it looks like a great buy right now. Here's why.

The key takeaway from 3M's earnings report is that the economic environment negatively impacts the company's sales, but it's outperforming expectations on margins and, ultimately, earnings. In addition, the company continues to make progress on the key operational metrics of CEO Bill Brown's turnaround plans.

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First-quarter organic sales growth of 1.5% was weaker than the implied guidance at the start of the year of about 2.1%. However, adjusted earnings per share (EPS) of $1.88 came in ahead of the implied guidance of about $1.71.

Moreover, management's commentary implies that this trend will continue throughout the year. For example, CFO Anurag Maheshwari told investors that 3M was "trending to the lower end of our 2% to 3%" guidance for full-year organic sales growth. He also said, "We see upside to the midpoint of our margin and earnings guidance range."

He also noted that 3M was trending $0.10 better than its full-year guidance of EPS of $7.60 to $7.90, but management shaved $0.10 off its expectations as a contingency for the "current environment."

As such, if the tariff dispute is resolved and 3M's sales outlook can improve, it's reasonable to expect a combination of operational leverage (margin expansion due to more sales volume) and better operational performance on margin (as demonstrated in the first quarter) to lead to upside potential for EPS in 2025.

In addition, 3M's progress on Brown's key operational metrics suggests that investors will start to see earnings improvement in the near and long term.

First, Brown wants to boost the long-term growth rate by restoring a culture of innovation and releasing new product introductions (NPIs). While it will take time to develop truly breakthrough products, 3M can focus on NPIs like product line extensions. In fact, 3M launched 169 NPIs in 2024 (up 32% over 2023), and in the recent first quarter alone launched 62 NPIS, with Brown intending to launch 215 through 2025 and 1,000 over the next three years.