SMG Should I Buy
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Scotts Miracle-Gro Co (SMG) is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock faces uncertainties due to rising raw material costs, and recent financial performance shows a decline in revenue despite improvements in net income and EPS. Analysts have mixed views, with some downgrades and cautious optimism. Technical indicators and options data do not suggest a strong upward momentum, and there are no significant positive catalysts or trading signals to justify immediate action.
The MACD is positive but contracting, indicating weakening momentum. RSI is neutral at 38.794, and moving averages are converging, suggesting no clear trend. Key support is at 60.788, and resistance is at 66.938. The stock is trading below the pivot level of 63.863, showing limited upward potential in the short term.
John Rogers expects shareholder returns to improve through share buybacks, potentially boosting earnings and stock price. Analysts like Stifel and Wells Fargo have raised price targets recently, reflecting some optimism.
JPMorgan downgraded the stock due to expected higher raw material costs in fiscal 2027, which could impact earnings growth. Revenue declined by 3.33% YoY in Q1 2026, and the stock has a 40% chance of declining in the short term based on candlestick pattern analysis.
In Q1 2026, revenue decreased by 3.33% YoY to $354.4M. However, net income improved significantly, reducing losses by 79.86% YoY to -$125M. EPS also improved by 78.51% YoY to -2.16. Gross margin increased to 25.4%, up 3.59% YoY, indicating some operational efficiency improvements.
Analysts have mixed views. JPMorgan downgraded the stock to Neutral with a lower price target of $67 due to raw material cost concerns. Stifel and Wells Fargo raised price targets to $79 and $75, respectively, citing underappreciated growth potential and sector performance. UBS maintained a Neutral rating with a slight price target increase to $67.
