How To Trade 3M Stock Ahead of Its Earnings?

3M (NYSE: MMM) is set to release its earnings on Tuesday, October 21, 2025. This report holds significant importance for traders, especially those who utilize event-driven strategies.

In the past five years, 3M’s stock has shown a balanced response to earnings announcements, with an even division of positive and negative one-day returns after the results. In 50% of cases, the stock recorded a positive one-day return, averaging 4.8%. On the other hand, in the remaining 50% of cases, it faced a negative one-day return with an average of -2.8%. This historical trend indicates a considerable level of volatility and an absence of a consistent upward or downward trend following earnings.

For the upcoming third quarter of 2025, consensus predictions expect earnings of $2.07 per share on revenue of $6.26 billion. This contrasts with the earnings per share of $2.14 from the same quarter last year, even though current sales are projected to surpass the previous year’s $6.07 billion.

While the actual financial results and their comparison to consensus and expectations will significantly shape the stock’s immediate response, grasping these historical patterns can offer crucial insights for event-driven traders. There are two main strategies to contemplate:

• Pre-Earnings Positioning: Based on the historical probabilities, a trader might opt to take a position prior to the earnings release, anticipating a move (either upwards or downwards) and managing the related risk considering the 50/50 distribution in past results.
• Post-Earnings Positioning: Alternatively, a trader might decide to wait for the earnings release, examine the immediate market reaction and the connection between short-term and medium-term returns, and subsequently position themselves accordingly after the announcement.

From a fundamental standpoint, 3M currently possesses a market capitalization of around $81 billion. Over the past twelve months, the company generated $25 billion in revenue. It exhibited operational profitability with $4.8 billion in operating profits and a net income of $3.9 billion.

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3M’s Historical Odds Of Positive Post-Earnings Return

A few observations regarding one-day (1D) post-earnings returns:

1. There are 20 earnings data points documented over the past five years, with 10 positive and 10 negative one-day (1D) returns recorded. In summary, positive 1D returns occurred approximately 50% of the time.
2. Interestingly, this percentage rises to 58% when we analyze data from the last 3 years instead of 5.
3. Median of the 10 positive returns = 4.8%, and median of the 10 negative returns = -2.8%

Additional information for observed 5-Day (5D) and 21-Day (21D) returns following earnings are presented along with the statistics in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky approach (though not effective if the correlation is weak) is to comprehend the correlation between short-term and medium-term returns after earnings, identify a pair that displays the highest correlation, and perform the suitable trade. For instance, if 1D and 5D exhibit the strongest correlation, a trader can position themselves “long” for the following 5 days if the 1D post-earnings return is positive. Below is some correlation data derived from a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D relates to the correlation between 1D post-earnings returns and subsequent 5D returns.

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