Today, 3M (MMM) blew away earnings estimates with earnings per share (EPS) of $2.77 vs. $2.16 in the prior year, much better than estimates of $2.29, with sales growth of 9.6% topping expectations of 7.0%.

Organic sales growth of 8.0% was strong across all sectors. The fastest-growing segments were Safety and Industrial, up 13.7%, and Consumer, climbing 9.8%. Health Care organic sales were up 6.8%, despite difficult COVID-19 comparisons in 2020, while Transportation and Electronic sales were up 9.3% as that segment continued its strong recovery.

Overall profitability was strong, with operating margins greater than 20% in all segments, demonstrating typical 3M consistency. Despite the strong results, the stock is lower on the day, as the company left EPS guidance for the year unchanged at $9.20 to $9.70. MMM cited cost inflation, uncertainty in demand due to the impact of COVID-19 and continued investments in growth.

However, I think the company is being somewhat conservative here, indicating on the conference call that the guidance does not include potential price increases. I expected earnings for the year to come out at the high end of the given range.

3M remains attractively valued versus other major industrial companies, and I recommend purchasing them under $185. My target is $205.

Last week, Old Republic (ORI) reported first-quarter operating EPS of $0.69 vs. $0.47 in the prior year, much better than expectations of little-changed results. The company’s title insurance business continues to be very strong, with premiums up 40.1% to $967.7 million. General Insurance premiums were up 0.7% to $859.1 million, and a 3.1% decline in claims costs all helped the bottom line. Aided by the strong stock market, book value per share ended the quarter at $21.59, up 25% from a year ago. The gain would have been greater if not for the $1.00 a share special dividend the company paid in January.

As a result of continued operating strength and market momentum, I am raising my target price in ORI to $26, which is 1.2X book value and 12X forward earnings. My buy under price is now $20.