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JPMorgan Upgrades 3M and Emerson Electric to Overweight on Growth Outlook
Summary
JPMorgan raised its ratings on industrial firms 3M and Emerson Electric to Overweight from Neutral ahead of earnings, citing improving growth prospects, strong backlogs, and expanding margins.
JPMorgan has upgraded industrial conglomerates 3M and Emerson Electric to Overweight from Neutral, expressing confidence in their growth trajectories and earnings momentum ahead of their upcoming quarterly reports. The bank cited supportive end-market trends and company-specific strengths for its more bullish stance on both companies.
3M Upgraded on Growth and Margin Outlook
JPMorgan raised its rating on 3M (MMM), lifting its December 2026 price target to $180 from a previous $178. In a note to clients, the bank's analysts stated the company is entering a new phase where revenue growth will increasingly fuel earnings expansion.
The upgrade is underpinned by an expectation for second-quarter organic growth to exceed 3%. JPMorgan identified strength in data centers, semiconductors, and industrial markets as key drivers, which it expects will offset persistent weakness in the consumer electronics and automotive sectors.
Looking further out, the bank projects that a combination of pricing power, productivity gains, and lower costs related to PFAS litigation will support margin growth through 2027. JPMorgan's forecast for 3M's second-quarter adjusted earnings per share is $2.26, slightly above Wall Street consensus estimates.
AdEmerson's Strong Backlog Drives Upgrade
For Emerson Electric (EMR), JPMorgan moved to an Overweight rating while maintaining its price target at $157. The bank argued that market concerns about the pace of growth in the second half of the year overlook the strength of the company's existing orders.
According to the note, Emerson's backlog has increased by 9% year-over-year, providing clear visibility for an acceleration in organic growth in the latter half of its 2026 fiscal year. This backlog is supported by long-cycle projects in sectors including power, liquefied natural gas (LNG), semiconductors, and aerospace.
JPMorgan also noted that rehabilitation work in the Middle East could provide an additional upside not currently factored into the company's guidance. This positive outlook stands despite continued softness in European and Chinese chemical markets.
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