03:44 PM EDT, 06/24/2024 (MT Newswires) -- 3M ( MMM ) has been riding on a wave of positive investor sentiment spurred by several factors including the recent appointment of a new chief executive, but caution is necessary, UBS said in a note Monday.

The appointment of Bill Brown as CEO, progress on per- and polyfluoroalkyl substances, or PFAS, cleanup and margin execution are positives for the company's stock but UBS analysts' optimism is dampened by continued weakness in revenue, uncertainty around remaining PFAS liabilities and limited free cash flow, according to the note.

The chemical manufacturer has agreed to contribute up to $10.3 billion over 13 years to public water systems that have found PFAS in drinking water.

"Such settlement would remove uncertainty, but with limited ability to assess the risk and related hit to free cash flow, valuation upside is limited in our view," UBS said.

And while the new CEO "could be a positive catalyst for the business over time," the firm said it is modeling flat organic sales for full-year 2024, which compares with consensus estimate of a 1% increase and is at the low end of flat to 2% growth guidance, UBS said.

UBS kept its neutral rating and $100 price target on 3M ( MMM ).

Price: 102.87, Change: +0.48, Percent Change: +0.47