Report
Valens Research

SMG - Embedded Expectations Analysis - 2021 02 12

The Scotts Miracle-Gro Company (SMG:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with an 18.4x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about growth, pricing, and the Bonnie business

Specifically, management may lack confidence in their ability to realize growth opportunities, meet their leverage targets, and sustain rapid shipments growth. In addition, they may have concerns about the progress of their business combinations, the health of US consumer demand, and their position as price-takers. Furthermore, they may be overstating the potential of Project Focus and the strength of the Bonnie business 3-year earnings average
Underlying
Scotts Miracle-Gro Company Class A

Scotts Miracle-Gro is a manufacturer and marketer of consumer lawn and garden products in North America. The company's segments are: United States Consumer, which consists of the company's consumer lawn and garden business located in United States; Hawthorne, which consists of the company's indoor, urban and hydroponic gardening business; and Other, which consists of the company's consumer lawn and garden business in geographies other than the United States and the company's product sales to nurseries, greenhouses and other customers. The company manufactures, markets and sells lawn and garden products in the following categories: lawn care, gardening and landscape, hydroponics, and controls.

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Valens Research
Valens Research

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