3M: We Downgrade Moat Rating to Narrow From Wide

We reduced our 3M fair value estimate to $123 from $131, due to the moat downgrade to narrow from wide. We think that 3M’s basic moat framework remains valid. Specifically, 3M's centralized research and development capabilities should protect excess returns. However, that argument is far weaker than it used to be. Consequently, we’re less confident in 3M's moat durability.