3M Stock Takes Lead among Dow’s Decliners Following S&P Credit Rating DowngradeMARKET UPDATEIn early Wednesday trading, shares of 3M Co. experienced a 1.5% decline, emerging as the leading laggard within the Dow Jones Industrial Average. This downward movement follows a credit rating downgrade by S&P Global Ratings, which affected the consumer, industrial, and health care products companies. The downgrade was prompted by 3M’s recent agreement to allocate up to $6 billion for settling litigation related to its Combat Arms earplugs.
3M Stock Takes Lead
S&P lowered 3M’s credit rating to BBB+, positioning it just three notches above the speculative grade, often called “junk” territory. The rating outlook remains pessimistic. Although S&P acknowledged the settlement as a “reasonable” move that brings some clarity, it highlighted that the deal also contributes to an increase of approximately $4 billion in adjusted debt.
Conversely, Moody’s Investors Service characterized the Combat Arms settlement as “credit negative,” but indicated that the terms were “less burdensome” than anticipated, subsequently reducing uncertainties. As a result, Moody’s upheld 3M’s credit rating at A2, a rating that stands five notches above junk status. However, the outlook remains negative.
On the heels of the Combat Arms settlement announcement, 3M’s stock gained 1.4% on Tuesday, following a substantial 5.2% surge on Monday upon reports of the impending settlement. Year-to-date, the company’s stock has decreased 13.3%, in contrast to the Dow’s 5.2% increase during the same period.
