3M Company (NYSE:MMM) CEO William Brown has told investors that the company’s operational turnaround is progressing ahead of its own targets. New product activity is expanding, delivery performance has improved, margins are moving higher, and the data-center opportunity tied to its Microsoft partnership is growing rapidly. Together, these metrics provide a detailed picture of improving operational performance. However, management’s argument that its legal uncertainty is becoming “better defined” continues to face challenges. A Montana federal judge recently allowed a PFAS class action to proceed, while a separate lawsuit brought by the Australian government remains in the courts. That leaves a clear contrast between the company’s improving operational performance and legal risks that have not yet been fully put to rest.
Brown Details a Turnaround Running Ahead of Plan
According to William Brown, 3M is currently running ahead of the targets it set at its 2025 investor day. He highlighted:
We are clearly making progress. We’re seeing more sustained organic growth. We’re seeing a clear step up in margins.
The company has improved its on-time delivery rate from the low 80% range to around 90%. Product development has also picked up, with the number of launches increasing from 125 three years ago to 284 last year, while 3M expects to exceed 350 launches this year. New products are becoming a larger part of the business as well, with their contribution to sales expected to reach around 20% by 2027, compared with approximately 11% when Brown took over. Meanwhile, 3M’s expanded beam optical technology, which Microsoft has adopted as a data-center standard, could serve a market that Brown estimates at nearly $2 billion. The company recorded 5.4% adjusted organic sales growth in the second quarter, while Brown said 3M is now tracking above a 25% operating margin by 2027.
The Litigation Chapter Isn’t Closed Yet
A Montana federal judge recently denied, without prejudice, motions to dismiss a nationwide PFAS class action involving firefighter turnout gear, leaving 3M facing continued legal uncertainty. The company is also dealing with a separate lawsuit filed by the Australian government seeking more than A$2 billion in damages, which alleges that 3M withheld information and misrepresented what it knew about the environmental risks of its PFAS-containing firefighting foam. 3M’s existing $10.5 billion to $12.5 billion U.S. settlement covers claims released by participating public water systems, while other PFAS-related litigation remains outstanding.
3M’s operational progress is becoming increasingly visible, supported by measurable improvements across the business. However, the company’s description of its legal risk as “better defined” continues to face challenges as new PFAS developments emerge across different jurisdictions.
Institutional interest in 3M strengthened during the quarter, as the number of hedge funds climbed from 63 funds at the end of Q1 2026 to 72 funds at the end of Q2 2026. However, short interest remained relatively low at 1.79% of float as of August 31, 2026. These metrics suggest that institutional confidence in Brown’s operational progress is continuing to build.
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