Solventum Stock Jumps as Activist Trian Discloses Stake

Shares of former 3M MMM 1.01% healthcare business Solventum were rising late on Monday after investors discovered activist fund Trian is building a position.

“Trian is one of the largest shareholders of Solventum…recognizing that the division had consistently been one of the best-performing businesses inside of 3M,” Trian said in an emailed statement to Barron’s, adding there is “significant value creation opportunity as a standalone public company.”

3M’s former business sells wound care products, IV management solutions, dental products, filtration technologies, and health information systems, among many other things.

Solventum stock was up 3.4% in after-hours trading Monday at $55.99 a share. Shares were down 0.8% in regular trading while the S&P 500 SPX 1.08%
gained 1.1% and the Dow Jones Industrial Average rose 0.3%.

3M spun off Solventum on April 1. Solventum shares started trading at about $80 a piece just before the spin. They haven’t held up well. 3M investors receiving the stock decided to sell instead of wait around for improvement.

Wall Street sees little sales growth forecast for the next several years, according to FactSet. Operating profit in 2024 is expected to be about $1.8 billion. The estimate for 2026 is $1.7 billion.

Low growth is why shares trade for 1o times estimated 2025 earnings per share.

Still, Trian sees an opportunity. “Trian believes the company can unlock its potential through re-accelerating organic growth, restoring margins while investing to drive growth, and simplifying the company’s portfolio of businesses,” added Trian in its statement.

The fund manager said it “looks forward to engaging constructively with Solventum’s management and board.”

Trian declined to comment on its plans beyond its initial emailed statement, which didn’t disclose the size of its stake. Typically, an activist investor could seek board seats or ask for other changes, including the sale of business segments. They try to give stocks a boost by accelerating changes.

Solventum didn’t immediately respond to a request for comment.

Since the spin, five Wall Street analysts have picked up coverage, according to FactSet. None rate shares a Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst target price for Solventum shares is $58.