Scotts Miracle-Gro Company (SMG)
NYSEMaterialsAgricultural InputsSnapshot 2026-09-09
$56.90-1.10%
Close 2026-09-09 · 1-day change
NYSEMaterialsAgricultural InputsSnapshot 2026-09-09
Broken: Primary pillar broken — U.S. Consumer segment net sales growth: Q3 FY26 YoY +1.0% vs 5% target.
Scotts Miracle-Gro grows sales about 5% yearly in its U.S. Consumer segment. Profit margins improved to 41.8% in Q2 2026. The company aims for EPS of $4.15 to $4.35 in fiscal 2026. Free cash flow target is $275 million, supporting stable dividends.
Revenue growth could slow below 5%. Profit margins might compress from current levels. Free cash flow may fall short of $275 million, pressuring capital returns.
The price is about 22% below our $86 fair value, reflecting a cautious view with expected revenue decline of -1.5%. Our fair value is 15% above the Street median, showing upside if growth and margins hold.
Breaks if: dividend cut or suspension in FY26
Continue paying a quarterly dividend of $0.66 per share to shareholders as part of capital allocation strategy.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a turnaround story in the materials sector. The current thesis state is mixed, with some positive developments but also notable risks that could impact performance.
The market currently prices SMG as relatively cheap compared to its peers, with a low expectations gap. This suggests that investors may not be anticipating significant growth or improvement in the near term.
Management is focused on achieving its earnings per share and free cash flow targets, which have been reaffirmed in recent quarters. However, the company has shown mixed results in recent financial performance, which could affect its ability to meet these targets.
The thesis hinges on several factors, including the potential for inflation to rise, which could benefit the materials sector. Additionally, performance from sector leaders like CTVA, CF, and MOS will be crucial for maintaining momentum.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports the thesis. Guidance reaffirms fiscal 2026 EPS targets and outlines a strategy for higher margins and digital growth. The acquisition of the Black Kow soil brand also reinforces revenue growth in the U.S. Consumer segment.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 5 of last 5 quarters. The Company has consistently paid a dividend of $0.66 per share each quarter from 2025-Q3 through 2026-Q3. This demonstrates stable capital allocation to shareholders with no change in dividend payout, indicating delivery on this priority.
“Dividend per share was $0.66.”
“Dividend per share was $0.66.”
“Dividend per share was $0.66.”
“Dividend per share was $0.66.”
“Dividend per share was $0.66.”
Breaks if: EPS falls below $4.15 in FY26
Breaks if: free cash flow falls below $200 million in FY26
Maintain free cash flow generation target of $275 million for fiscal 2026 to support leverage reduction and shareholder returns.
Stated as a priority in 3 of last 3 quarters. The Company reaffirmed a free cash flow target of $275 million for fiscal 2026 each quarter. Cash from operating activities was $345.6 million in 2026-Q3, supporting the target. The trajectory is delivering as management maintains this target and reports strong operating cash flow.
“Free cash flow of $275 million, driving leverage ratio down to the high 3s.”
“Fiscal 2026 guidance includes free cash flow of $275 million.”
“Company reaffirmed free cash flow guidance of $275 million for fiscal 2026.”
Breaks if: gross margin falls below 30% in Q3 FY26
Breaks if: YoY net sales growth falls below 3% in FY26
In the next 1 to 3 years, SMG's performance will depend on its ability to execute on its financial targets and navigate sector dynamics. Not investment advice.