JPMorgan downgraded 3M to Neutral, arguing the stock’s 72% rally since mid-2024 has already priced in early execution gains. The bank expects constrained growth and earnings momentum in the near term, with organic revenue growth of 3.5% in 2026 but EPS growth under 9%, lagging the industrial sector.

The downgrade centers on 3M’s ongoing corporate restructuring, shifting from a holding company to an operating model. While this aims to centralize oversight and R&D, JPMorgan notes the effort is still in its early stages and will take years to yield sustained growth. The company is also pushing into mainstream markets, but historically struggles to find high-margin space.

Further headwinds include PFAS-related liabilities and pending litigation, which constrain capital allocation and could distract management. With valuation elevated relative to its growth profile and limited near-term upside, JPMorgan prefers other industrial names for cyclical exposure. Investors will watch upcoming personal injury trials and the pace of asset divestitures.