Key insights
- Jefferies reiterated a Buy rating on Scotts Miracle-Gro (SMG), citing positive near-term dynamics and medium-term growth strategies, particularly smaller, bolt-on acquisitions in the live goods sector. SMG is de-emphasizing low-margin products to improve margins, targeting over 32% gross margin. The upcoming Analyst Day is seen as a potential catalyst. SMG's recent Q1 earnings beat expectations, and the classification of Hawthorne as held for sale signals a strategic shift, potentially improving focus and profitability.
Investing.com - Jefferies reiterated a Buy rating and $82.00 price target on Scotts Miracle-Gro (NYSE:SMG) following a meeting with company executives in New York City. The target implies 22% upside from the current price of $62.25, while InvestingPro analysis suggests the stock is trading near its Fair Value of $61.32.
Jefferies analyst Jonathan Matuszewski met with EVP & CFO Mark Scheiwer, President & COO Nate Baxter, and VP - Treasury, Tax & Investor Relations Brad Chelton. The firm cited upbeat messaging on near-term dynamics and medium-term building blocks.
The firm believes live goods are a top priority vertical within lawn & garden for bolt-on M&A opportunities, based on President & COO Nate Baxter’s favorable tone on Bonnie Plants. CFO Scheiwer indicated there are no plans to "go big" anytime soon, which could set the stage for multiple smaller acquisitions in the years ahead.
Management has been vocal with retailers regarding their intention to de-emphasize low-margin commodity SKUs in pursuit of lifting margins over time. The company confirmed the pivot is playing out as expected.
Jefferies expects a path to gross margin solidly over 32% for the year, up from the current 31.3%. The firm named Scotts Miracle-Gro a top pick in small-cap, with the upcoming Analyst Day as a catalyst. An InvestingPro tip highlights that the company has maintained dividend payments for 22 consecutive years, currently yielding 4.24%.
In other recent news, Scotts Miracle-Gro Company reported its Q1 2026 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of -$0.77, compared to the projected -$1.01. The company also exceeded revenue forecasts, reporting $354.4 million against an expected $352.28 million. Additionally, Scotts Miracle-Gro announced that it has classified its Hawthorne business as held for sale and reclassified its results as a discontinued operation, reflecting a strategic shift. This change has been incorporated into their financial reporting for fiscal years 2024 and 2025.
Furthermore, Stifel raised its price target on Scotts Miracle-Gro stock to $79 from $70, while maintaining a Buy rating, citing a positive growth outlook. The firm is set to host Scotts Miracle-Gro executives at the 3rd Annual Stifel Consumer Ski Event in Jackson Hole, Wyoming. These developments highlight significant strategic and financial activities within the company.
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