3M Co said on Tuesday it would face headwinds, especially in the developed world, that would prevent sales from hitting internal targets in 2011, a forecast that made its stock the biggest decliner on the Dow.

The diversified manufacturer, which makes everything from Post-It Notes to industrial abrasives, expects organic sales to grow 5.5 percent to 7.5 percent, below its long-run internal target of 8 percent to 9 percent.

3M said the challenges it faces were largely macroeconomic and concentrated in the United States and Western Europe.

The company warned that persistently high unemployment in the United States, coupled with a growing savings rate among U.S. consumers, would hold down results in its home market, while deep austerity measures in a growing number of Western European economies and rolling debt crises would retard growth there.

It also said sales of its optical film, which is used to brighten television and computers screens, would not be as strong as it hoped in the near term because manufacturers were discounting and more interested in price than technology.

It expects its attachment rate -- an internal market share measure -- in the space to be just 40 percent in 2011, down from the previous expectation of 55 percent.

Adam Fleck, an analyst at Morningstar, called the issues in the optical film business a short-term problem for the company.

I don't think 3M's market positioning has dramatically changed, but the business could well be a laggard over the next several quarters, he said.

3M, which has been on an M&A spree this year, also said it expects to continue next year and plans to spend up to $3 billion on acquisitions.

So far in 2010, it has announced nearly a dozen acquisitions, spending nearly $2.5 billion in the four deals whose terms it disclosed.

Acquisitions have taken 3M, which already has a broad lineup of consumer, industrial and medical products, into new businesses such as biometrics and electronic people-monitoring, and bolstered its presence in others, such as healthcare.

Overall, 3M's profit target is about what we were expecting, said Fleck. But the firm's continued commitment to acquisitions is likely the biggest risk.

He said 3M had a pretty good track record with M&A -- 60-plus acquisitions since 2005 with no write-off of goodwill -- but management must stay disciplined about purchase prices.

The manufacturer, which makes products ranging from Post-It notes to industrial abrasives, expects a 2011 profit of $6.17 to $6.37 per share, excluding pension costs, on revenue of $29 billion to $30.5 billion.

Analysts' average forecast was a profit of $6.20 per share on revenue of $29.15 billion, according to Thomson Reuters I/B/E/S.

Oliver Pursche, co-portfolio manager of the GMG Defensive Beta Fund , which has been active in 3M shares recently, said that, although management is expressing some caution over U.S. growth, we believe that the combination of their acquisition strategy, as well as strong product lines may lead to positive surprises on that front.

3M said it sees more sales potential in Latin America than in China. It said India and Latin America were gathering momentum in China-like fashion.

Pursche was particularly encouraged by the company's projections about emerging market growth. He said 3M would benefit from the global wealth shift that is helping to boost growth in the developing world.

3M shares were down $2.16 at $84.72 in early afternoon trading on the New York Stock Exchange.

Several major U.S. manufacturers are set to lay out their 2011 expectations to Wall Street this week. Executives from General Electric Co's finance arm brief analysts later on Tuesday, while officials from United Technologies Corp and Rockwell Automation Inc sit down with investors later this week.

(Additional reporting by Scott Malone; editing by Dave Zimmerman, John Wallace and Andre Grenon)

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