These 2 Stocks Are Jumping Big After Hours Thursday

It initially looked as though Thursday would be another bad day for the stock market, but most major market indexes reversed course and headed higher by the end of the day. Gains were sharpest for the Nasdaq Composite (^IXIC 2.02%), while the S&P 500 (^GSPC 1.02%) enjoyed smaller gains and the Dow Jones Industrial Average (^DJI 0.40%) essentially sat out the modest rally.

Data source: Yahoo! Finance.

There was interesting news in the after-hours session that resulted in some big moves among well-known stocks. Dow component 3M (MMM 0.46%) saw gains, despite committing to a costly resolution of a major problem, while pet insurance specialist Trupanion (TRUP 3.48%) got even bigger gains on a favorable rate ruling. Below, you'll learn more about the details that sent these two stocks higher late Thursday.

3M hopes to put litigation behind it

Shares of 3M climbed 5% in the after-hours session late Thursday afternoon. The company agreed to a costly settlement in class action litigation, but investors are hopeful that 3M can move forward from here without further controversy.

3M faced claims from numerous public water suppliers across the nation that sought compensation for prospective remediation of per- and polyfluoroalkyl substances (PFAS) contamination. The proposed settlement would provide funding for water suppliers to install PFAS treatment technologies, both in places where there are existing problems and for water suppliers that could detect PFAS in the future. 3M will make contributions over the next 13 years that amount to a present value of $10.3 billion.

The news was largely anticipated, with reports earlier in June of a possible settlement in the range of the actual financial amount. Speculation at that time had led to a larger 8% jump in the stock price, but investors seem even more pleased with the actual terms of the deal.

The settlement is still subject to court approval. Yet 3M is optimistic that it can move on as it plans to end all manufacturing of PFAS chemicals by the end of 2025.

Trupanion gets some lucrative approvals

Shares of Trupanion got an even bigger boost in the after-hours session, climbing 13%. The pet insurance provider reported favorable resolutions of rate requests in a pair of key markets.

The latest updates from Trupanion involved rate filings in the states of California and New York. On the West Coast, California insurance regulators approved a rate increase of over 12%, coming just seven months after a previously approved increase of 8% last November. Similarly, in New York, Trupanion got approval for an even bigger 18% rate increase, supplementing a 6% boost to rates approved in November 2022.

Trupanion noted that the increases were necessary because of the rising cost of veterinary care, particularly in those two large markets. Yet as the costs of going to the vet increase, it's likely that more pet owners will turn to insurance products to try to lessen their own personal contributions. That could easily lead to more business for Trupanion, which, in turn, should generate even more profits over the long run.

Based, in part, on the boosts to these rates, Trupanion reiterated its belief that it will be able to report positive free cash flow by the fourth quarter of 2023, as spending cuts and greater operational efficiency should offset an expected 15% rise in veterinary-care costs year over year. With Trupanion carving out a niche in this growing market, shareholders are excited about its prospects to capture more market share.