3M plunges after earplug verdict; J.P. Morgan sees significant liabilities – Seeking Alpha

3M (MMM -4.3%) falls to a 52-week low following yesterday’s $110M jury award to two U.S. Army veterans over combat earplugs said to cause hearing loss, which the company says it will appeal.

J.P. Morgan analyst Stephen Tusa says 3M could face “significant” potential liability exposure that is “under-appreciated by investors” and comes on top of lingering PFAS liability.

Using “the most onerous simple math,” Tusa calculates earplug liabilities could total $1.5T for the ~285K caseload, while a “highly conservative scenario” could suggest a bar of $10B – “this is just the simple math, but the point is that these numbers are large,” the analyst says.

Tusa notes the 285K actions pending comprise the largest multi-district litigation in history, larger than asbestos (192K) and representing more than half of pending MDL cases in the U.S.

In a bullish new analysis published on Seeking Alpha, David J. Waldron calls 3M “a defensive core conviction buy, whether the market is up, down or sideways.”