11:13 AM EDT, 04/02/2024 (MT Newswires) -- 3M's ( MMM ) successful spinoff of healthcare business Solventum resulted in modest updates to its model, RBC Capital Markets said in a note Monday.

The company raised its Q1 earnings per share guidance last month to $2.05-$2.20 from $2.00-$2.15. The increase in the company's EPS estimate is due to the interest income on the $7.7 billion financing ahead of the Solventum spinoff, according to the note.

The firm said it is also adding back $150 million to $175 million of annual stranded costs into the updated model along with income and costs associated with Solventum transition service agreements.

RBC expects that 3M ( MMM ) will hold onto and generate interest on the dividend Solventum paid to the company.

The firms said a sum of part valuation of 3M ( MMM ) including the unaddressed per- and polyfluoroalkyl substances liability shows a 15% downside to the company's shares.

RBC reduced the price target on 3M's ( MMM ) stock to $78 from $84 and reiterated its underperform rating.

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