Last Updated: 08 Nov 2024
Executive Summary
Scotts Miracle-Gro Company (SMG) is a leading manufacturer and marketer of lawn and garden products. The company has a strong market position, with a wide range of products that are sold through a variety of channels. SMG's financial performance has been mixed in recent years, but the company is expected to benefit from the growing demand for lawn and garden products. The stock is currently trading at a discount to its peers, and it offers a compelling opportunity for investors.
Company Overview
Scotts Miracle-Gro Company is headquartered in Marysville, Ohio. The company was founded in 1868, and it has since grown to become one of the largest lawn and garden companies in the world. SMG's products are sold in over 100 countries, and the company has a market share of over 50% in the United States.
SMG's product portfolio includes a wide range of lawn and garden products, including fertilizers, herbicides, pesticides, and seeds. The company also sells a variety of lawn and garden equipment, such as mowers, trimmers, and edgers. SMG's products are sold through a variety of channels, including mass retailers, hardware stores, and garden centers.
Fundamental Analysis
SMG's financial performance has been mixed in recent years. The company's revenue has declined in each of the past three years, and its earnings per share have been volatile. In fiscal 2023, SMG reported revenue of $3.51 billion and earnings per share of -$3.75.
Despite the recent decline in revenue, SMG's financial position remains strong. The company has a low level of debt, and it generates a significant amount of cash flow from operations. SMG's balance sheet is also strong, with the company having a book value of $2.574 billion.
SMG's valuation metrics are currently attractive. The stock is trading at a discount to its peers, and it has a forward price-to-earnings ratio of 18.45. SMG's dividend yield is also attractive, at 0.0282%.
Technical Analysis
The technical analysis of SMG's stock price indicates that the stock is in a downtrend. The stock has been trading below its 50-day and 200-day moving averages, and it has recently broken below a key support level at $75.00. The technical indicators are also bearish, with the relative strength index (RSI) and the moving average convergence divergence (MACD) both indicating that the stock is oversold.
Short Term Outlook
The short-term outlook for SMG's stock is negative. The stock is in a downtrend, and the technical indicators are bearish. The stock is also trading below its key support level at $75.00. Investors should avoid buying SMG's stock in the short term.
Long Term Outlook
The long-term outlook for SMG's stock is more positive. The company has a strong market position, and it is expected to benefit from the growing demand for lawn and garden products. The stock is also trading at a discount to its peers, and it offers a compelling opportunity for investors. Investors should consider buying SMG's stock in the long term.
Analyst Recommendations
Analysts are mixed on SMG's stock. One analyst has a strong buy rating on the stock, three analysts have a buy rating, five analysts have a hold rating, and zero analysts have a sell or strong sell rating. The average analyst target price for SMG's stock is $87.60.
