3M Co (NYSE:MMM) settlement covering about 99% of current PFAS personal injury claims removes a major overhang, UBS said, with the cost below its estimate of investor expectations.
The broker described personal injury as the last remaining outstanding litigation item and said it expected the shares to outperform following the announcement.
UBS put the present-value cost of 3M's settlement at $5.8 billion, compared with its estimate that investors expected around $10 billion.
Total payments will reach $7.35 billion over nine years, with the settlement schedule placing disproportionately large payments in the final two years.
Payments begin with $50 million in 2026, followed by no payments in 2027, providing further detail on the timing of the company's financial obligations.
Alongside the settlement announcement, the board approved a new $6 billion share repurchase authorization, bringing the total authorization to $7.5 billion.
With greater clarity on those liabilities, UBS said 3M could attract a broader investor base, while maintaining its positive view of the company's growth and earnings opportunity.
