3M names new CEO, and the stock is having its best day in 5 months

By Tomi Kilgore

Mike Roman will become just executive chairman, and 3M names former L3Harris chief William Brown as its next CEO

3M Co.'s investors cheered Tuesday, after the consumer, industrial and healthcare-products company named a new chief executive to replace Mike Roman, who held the position for the past six years.

Roman will become the company's (MMM) executive chairman, effective May 1, the same day that William Brown, who was the former chief executive of L3Harris Technologies Inc. (LHX), becomes 3M's new CEO.

The stock jumped 5% in morning trading, enough to make it the best performer among the Dow Jones Industrial Average's DJIA components.

The rally puts the shares of the maker of Post-it Notes, Scotch tape, N95 face masks and Command strips on track for the highest close since Jan. 22, and toward its biggest one-day gain since it ran up 5.3% on Oct. 24, 2023.

It's understandable that investors appear happy with the CEO change. Since the end of July 2018, when Roman became 3M's CEO, through Monday, the stock had tumbled 55.7% while the Dow had soared 52.5%.

While the stock had seen a nice bounce during the early COVID years, as 3M makes N95 face masks, it has suffered in recent years as the company agreed to pay billions of dollars to settle claims that it was responsible for putting "forever chemicals" in drinking water and for claims that it sold faulty ear plugs to the U.S. military.

On Jan. 23, the stock plunged 11% to suffer its biggest selloff in five years, and the second-biggest selloff on record, after the company provided a 2024 profit outlook that was well below what Wall Street had been projecting.

Meanwhile, shares of L3Harris rallied 27.8% from the end of June 2019 through June 2022, when William Brown served as CEO and chairman, and then executive chairman of the company.

He was previously CEO of Harris Corp., until that company completed its merger with L3 Technologies in June 2019.

-Tomi Kilgore

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03-12-24 1041ET

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