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The Scotts Miracle Gro Co SMG

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Maintaining $160 FVE as Scotts Raises 2021 Guidance; We View Shares as Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

On June 1, Scotts Miracle-Gro increased its 2021 guidance due to higher sales growth in both the U.S. consumer and Hawthorne segments versus previous guidance. Management expects the higher sales to flow to the bottom line, increasing adjusted EPS guidance to a range of $9 to $9.30 per share up from $8.60 to $9. In updating our model to incorporate Scotts' fiscal second-quarter earnings, we had increased our sales forecasts above previous guidance for both the U.S. consumer and Hawthorne segments. As a result, our fiscal 2021 adjusted earnings per share forecast of $9.23 is already above the midpoint of management's updated guidance range.

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Company Profile

Business Description

Scotts Miracle-Gro is the largest provider of gardening and lawncare products in the United States. The majority of the company's sales are to large retailers that include Home Depot, Lowe's, and Walmart. Scotts Miracle-Gro can sell its products at a higher price point than its competition because of a well-recognized portfolio of brands that include Miracle-Gro, Roundup, Ortho, Tomcat, and Scotts. Scotts is also the leading supplier of cannabis-growing equipment in North America through its Hawthorne business.

Contact
14111 Scottslawn Road
Marysville, OH, 43041
T +1 937 644-0011
Sector Basic Materials
Industry Agricultural Inputs
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 30, 2021
Stock Type Cyclical
Employees 5,932

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