Scotts Miracle-Gro Company Dossier - Source-backed chat

Scotts Miracle-Gro Company

SMGNYSE

SectorMaterials

IndustryAgricultural Inputs

Beta (adjusted)1.56

Intrinsic Value $26.53median of 5 methods · middle span $23-$58based on filings through 27 Jun 2026

Market Price $50.02Price as of 1 Oct 2026

OvervaluedIntrinsic value is 47% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $2.9B

Enterprise Value $5B

Shares Outstanding 59.2M diluted

Moat Rating Wide

Next Earnings Date4 Nov 2026

Last ex-dividend21 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Scotts Miracle-Gro (SMG) is undergoing a powerful margin recovery and deleveraging phase, supported by the strategic divestiture of its volatile Hawthorne hydroponics segment in April 2026. By refocusing on its high-margin core U.S. Consumer lawn and garden brands, securing 90% of its commodity costs, and leveraging AI-driven predictive modeling to optimize inventory, the company is well-positioned to expand gross margins to at least 32% in fiscal 2026. S&P Global's recent credit upgrade to 'BB-' reflects improved credit metrics and organic EBITDA growth, paving the way for leverage reduction and the initiation of a share buyback program by late calendar 2026.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets6 analysts · as of 18 Aug 2026

Low · most bearish analyst$70.00

Mean target$77.17

High · most bullish analyst$82.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

Severe weather anomalies disrupt peak seasonal gardening demand, leading to weaker retail sell-through. Retail partners (such as Home Depot and Lowe's) aggressively destock inventory, putting pressure on volumes. Unhedged commodity cost inflation in late fiscal 2026 compresses margins, delaying leverage reduction and the planned share repurchase program.

Base CaseCentral scenario

The company successfully executes its SMG 2.0 strategy, driving low single-digit sales growth in the U.S. Consumer segment. Gross margins stabilize at or above 32%, and free cash flow reaches the targeted $275 million, allowing the net leverage ratio to drop into the high 3s. Valuation multiples expand toward historical averages as earnings volatility decreases post-Hawthorne divestiture.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Refocused business model on high-margin core consumer brands following the Hawthorne divestiture in April 2026.
Strong cost visibility with approximately 90% of commodity costs locked in for fiscal 2026.
Upgraded credit profile by S&P Global Ratings to 'BB-' on improved operating performance and organic EBITDA growth.
Substantial inventory reduction achieved through machine learning and AI-driven demand forecasting.

Key Investment Risks

High seasonal weather dependency which can severely impact point-of-sale volumes in the second half of the year.
High customer concentration with major big-box retailers like Home Depot and Lowe's.
Elevated debt levels and leverage ratio, though actively being addressed through free cash flow allocation.

Thesis Invalidation Triggers

Adjusted gross margin falling below the guided 32% threshold due to unexpected cost pressures.
Free cash flow generation falling significantly short of the $275 million target, halting deleveraging progress.
A reversal in point-of-sale trends to negative year-over-year growth.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.