3M (MMM) has filed five legal actions in federal courts concerning fraudulent offers from vendors to sell N95 respirators at highly inflated prices- all while pretending to be affiliated with 3M.
In one case, one of the defendants claimed to have up to five billion respirators for sale, according to MMM. Another vendor attempted to sell 10 million N95 respirators to the Florida Division of Emergency Management at nearly 460% percent over list prices.
The claims, filed in Florida, Wisconsin and Indiana, are part of 3M’s global effort to protect the public and combat fraud and counterfeiting.
“We are grateful that in each of these cases, the false offers were reported to 3M, and the attempts to deceive public officials did not succeed,” said Ivan Fong, 3M Senior VP. “We will continue to take legal action in cases like these and are working closely with national and international law enforcement to help stop the perpetrators of these unlawful and unethical schemes.”
As the company points out, 3M has not changed the prices it charges for respirators as a result of the Covid-19 outbreak. It also said it will donate any damages recovered to coronavirus-related nonprofit organizations.
In total, 3M has now filed 10 lawsuits in April in its effort to combat fraud. The company, which is currently trading down 16% on a year-to-date basis, has a Hold consensus from the Street and $166 average analyst price target (12% upside potential). (See 3M stock analysis on TipRanks).
RBC Capital analyst Deane Dray notes that 3M aims to double its production of N95 respirators to 2 billion by year-end to meet the escalating global demand.
However he warns investors that “the company’s historical reputation for being a defensive “safe haven” has been eroded by its now-apparent sensitivity to demand softness and relatively limited forward visibility.” Dray has a Hold rating on the stock and $148 price target (0.4% downside potential).
Billionaire Warren Buffett Divests Airline Stakes, Sees No ‘Attractive’ Investments
Goldman Sachs: These 3 Stocks Are Poised to Surge by at Least 30%
Amazon Dips 8% on $4 Billion Virus Costs Amid Prospect For 2Q Loss