3M (MMM) Q2 2026 Preview: JPMorgan Upgraded Friday, EPS $2.27 Expected

TradingKey - 3M (NYSE: MMM) reported its Q2 2026 earnings earlier today (Tuesday July 21), before the market open, with an investor conference call scheduled for 9:00 AM ET. Prior to the earnings call, the market expected 3M to post EPS of $2.25 to $2.27 and revenue of $6.38 billion to $6.41 billion. On Friday July 18, JPMorgan upgraded MMM from Neutral to Overweight and increased its price target to $180.

The notable change in Q2 vs. Q1: Microsoft became the first named public customer deploying 3M's Expanded Beam Optical technology in AI data centres. In three months, the addressable market for that product increased from $1 billion to more than $2 billion. Three months ago, 3M posted its fourth-quarter EPS beat (average EPS surprise 4.6%). At $159.60, the triangle breakout at $161.63 represents the next technical level to watch.

Consensus Expectations, JPMorgan Upgrade, and Q1 Backlog Strength

The Zacks consensus for Q2 2026 was EPS of $2.27 and revenue of $6.38 billion, or a 3.6% year-over-year increase from Q2 2025's revenue of $6.16 billion. The Benzinga consensus estimated revenue slightly higher at $6.41 billion. With a positive Zacks Earnings ESP (Expectation Surprise Percentage) of 0.76%, there has been slight upward analyst revision above the headline consensus in recent weeks. With the four-quarter average surprise at 4.6%, 3M has been on a strong beating trend. On the Q1 earnings call, 3M management projected organic revenue growth greater than 3% in Q2, an operating margin approximately 24.5% for Q2, and EPS growth over $0.05 compared with Q1's EPS of $2.14, suggesting EPS would come in the range of $2.19 to $2.25 from the company's internal estimates.

On Friday July 18, JPMorgan's Chigusa Katoku upgraded 3M from Neutral to Overweight and increased its price target from $178 to $180. An analyst upgrade is usually released days or weeks before earnings. The fact JPMorgan upgraded and raised its price target the business day before 3M's Q2 2026 earnings release, with a price target $20 above the current price of $159.60, is highly unusual and signals that JPMorgan expects a positive Q2 earnings surprise that would accelerate 3M's ongoing restructure. 

At $159.60, 3M's shares were near the upper edge of the symmetrical triangle and below both the JPMorgan price target of $180 and the analyst consensus price target. That suggests there is still substantial room to move higher if the Q2 2026 earnings call validates the accelerating restructuring. 3M reported Q1 backlog increased more than 10% year-over-year and sequential backlog growth was also in double digits, with automotive backlog up roughly 20% year-over-year and approximately 35% sequentially. The backlog increase is the number that the management team pointed to as the leading indicator that 3M is on the verge of an Q2 revenue acceleration in 2026.

Microsoft Azure AI Data Centre EBO Deployment: Why the Addressable Market Has Doubled in Q2

In Q2, a key company specific event was the July 15, 2026 announcement that Microsoft deployed 3M's EBO technology in its Azure AI data centres. EBO technology replaces conventional optical fibre connectors with a new technology for connecting fibre cables. EBO is easier to install, more tolerant of fibre contamination, and better suited for the cabling in dense large AI server rack environments. 

On 3M's Q1 earnings call, CEO William Brown said a major hyperscaler had deployed EBO technology but did not say which company the first named customer was. The fact that Microsoft explicitly named itself as the first customer confirms that the technology has worked at scale in a production AI environment. The commercial implications are significant. 3M management stated the addressable market for EBO had grown from approximately $1 billion to more than $2 billion in just three months on the heels of the Microsoft customer deployment.

The data centre business at 3M, which is entirely inside the data centre, is accelerating by more than 50% sequentially and is 3M's fastest growing product line. Management will announce EBO revenue contribution for the first time on today's Q2 earnings call. Management will also name any other hyperscale customers beyond Microsoft. There is significant upside risk to 3M shares depending on what guidance management gives about the EBO contribution to the transportation and electronics business in which the data centre product resides. That call could impact 3M shares more than the earnings surprise or the consensus revenue miss.

3M Earnings Technical Analysis: Triangle at $161.63 and RSI at 52, with Key Technical Levels

On 2H, 3M at $159.60 is near the triangle's upper edge. 3M's 50-EMA at $159.70 and 100-EMA at $158.67 have supported price in the last few days, while the RSI of 52 is neutral and has room to move higher or lower.

3M (MMM) Price Chart - Source: Tradingview

A confirmed 2H close above $161.63 will target $164.77, with the triangle's upper boundary (trendline resistance) at $166.73 as the next resistance, then $168.62. The first technical support below today's price would be at $159.11. Next is support from the 100-EMA at $158.67, with $156.07 below that.

• Earnings release: July 21 (before market)
• Earnings conference call: 9:00 AM ET
• EPS consensus: $2.25 to $2.27 (+5% year-over-year from $2.16)
• Revenue consensus: $6.38 billion to $6.41B (+3.6% year-over-year)
• JPMorgan upgraded 3M Neutral to Overweight on July 18 (2 days before Q2 2026 earnings call), raised price target to $180 from $178
• Microsoft was named as the first named public customer deploying 3M's EBO in Azure AI data centres on July 15. Addressable market grew from approximately $1B to $2B+ in three months
• Bullish technical setup: A confirmed 2H close above $161.63 targets $164.77, the triangle upper boundary (resistance) at $166.73, and then $168.62
• 3M support at $159.11, $158.67 (100-EMA) and then $156.07

What Was Driving 3M’s Q2 2026 Setup Ahead of This Morning’s Report?

Three distinct factors created a favorable pre-earnings environment for 3M. The first was JPMorgan's decision to upgrade the stock from Neutral to Overweight on Friday, July 18, at the same time increasing its target to $180. This upgrade came a full two trading sessions before the Q2 print, a signal that the analyst expected strong results. 

The second catalyst was the backlog data from Q1 2026; year-on-year growth exceeded 10%, with automotive backlog jumping about 20% on a yearly basis and 35% on a quarterly basis. These metrics pointed to accelerating demand heading into Q2. Finally, Microsoft announced on July 15 that Azure AI data centres are rolling out 3M's Expanded Beam Optical (EBO) technology. 

This news confirmed management's claim that its fastest-growing product segment is surging more than 50% quarter-on-quarter. All of this was underpinned by strong statistical momentum: 3M has posted an average EPS beat of 4.6% over the last four quarters and carries an Earnings ESP of positive 0.76%.

What Is 3M’s Expanded Beam Optical Technology and Why Is Microsoft’s Deployment Significant?

Expanded Beam Optical (EBO) is 3M's alternative to conventional fibre optic connectors for data centre applications. Instead of directly matching up two polished fibre ends, EBO employs a beam expanding lens. This design makes it quicker to install, resistant to dust and dirt, and more dependable when dealing with the extreme cable density of large AI server clusters. 

The news that Microsoft was the first confirmed hyperscale customer for EBO in its Azure AI data centres, announced on July 15 by 3M CEO William Brown, was important because it proved the tech works in a live production setting. 

This success is why management said the potential market size for EBO jumped from roughly $1 billion to over $2 billion in just three months as other major data centre providers started expressing interest.

What Should Investors Watch Beyond the EPS Figure at 9:00 AM?

Three specific calls out on the 9:00 AM conference call are likely to have a far greater impact on the share price than the headline EPS number. First, any mention of a new hyperscale EBO customer (in addition to Microsoft) would confirm the market expansion and probably move the stock more than a standard earnings beat. 

Second, an updated number for the total addressable market for EBO, or a commentary on management's view of the contribution the data centre business will make to the full year 2026 revenue, would give Wall Street analysts the specific model parameters needed to raise their price targets. 

Finally, even a small step up for 3M's full-year adjusted EPS guidance, currently $8.50 to $8.70, would suggest that Q2 came in ahead of the internal forecast and that the year-over-year acceleration guidance is progressing on plan.

Bottom Line

3M is set to report its Q2 2026 results today prior to the open against expected EPS of $2.25 to $2.27 and revenue of $6.38 to $6.41 billion. A bullish catalyst came last Friday when JPM upgraded to Overweight with a price target of $180. 

On July 15, 3M reported that Microsoft was the first hyperscale EBO customer; in the wake of that news, the total addressable market grew from about $1 billion to more than $2 billion in just 3 months. This is 3M's fourth consecutive earnings beat with an average surprise of 4.6%. 

The key today will be any updates on new EBO customers on the 9:00 AM earnings call, comments on data centre revenue in the coming fiscal year, and any changes to the full year 2026 EPS guidance. Currently, 3M is trading at $159.60. A close above $161.63 would open the path to $164.77, $166.73. The next level of support sits at $156.07, after the current $158.67 support level is broken.