Scotts Miracle-Gro: Improving Margins and Sentiment Offset by Valuation and Seasonal Demand Risk Justify Hold Rating

Analyst Peter Grom from UBS maintained a Hold rating on Scotts Miracle-Gro Company and keeping the price target at $66.00.

Peter Grom has given his Hold rating due to a combination of factors related to both improving fundamentals and valuation risk. He notes that sentiment around Scotts Miracle-Gro has turned more positive following its recent results and FY26 outlook, particularly because the company has demonstrated strong execution on margin improvement and is guiding to further expansion. His estimates for sales growth, gross margin, EBITDA, and EPS are generally in line with or slightly above consensus and near the high end of management’s guidance, which suggests the current outlook is already well reflected in expectations. However, he also emphasizes that the business remains highly seasonal, with the critical lawn and garden selling period still ahead, meaning actual end-market demand and earnings delivery remain uncertain.

At the same time, Grom views the stock’s valuation as elevated after its recent share price increase, which makes it harder to justify a more constructive rating without clearer evidence of upside to his current forecasts. He expects the company to maintain its existing guidance in the near term, given the number of moving parts around FY26 and the fact that the key selling season has not yet played out. While he acknowledges that further margin recovery, cost savings, and potential benefits from Hawthorne could support longer-term earnings, he believes investors should wait for better visibility or a more compelling entry point. As a result, he concludes that a Hold rating is appropriate, balancing the improved margin story and sentiment against the current valuation and demand uncertainties.

According to TipRanks, Grom is an analyst with an average return of -2.9% and a 52.40% success rate. Grom covers the Consumer Defensive sector, focusing on stocks such as Campbell Soup, General Mills, and Monster Beverage.

In another report released today, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $63.00 price target.