Williams Blair has reaffirmed its Outperform rating on Scotts Miracle-Gro, citing a combination of operational improvements and management’s reiterated fiscal 2026 targets. The research firm highlighted that core shipments are running ahead of plan, margins are improving and leverage is moving in the right direction - factors it says support the company’s guidance and shareholder-return initiatives.
Market consensus currently sits at a 1.89 "Buy" recommendation with price targets ranging from $66 to $90, and market data draws attention to the company’s high shareholder yield and a 21-year record of consecutive dividend payments. Scotts Miracle-Gro’s dividend yield stands at 4.18%.
On a trailing-twelve-month basis the company has held a gross profit margin of 31.19% even as revenue declined by 3.93% over the same period. Williams Blair noted that the margin resilience, together with better-than-expected shipment trends, underpins confidence in the company’s commercial plans for the coming season and its ability to meet or exceed fiscal 2026 targets for sales, earnings, free cash flow and leverage.
Corporate actions announced by the company were highlighted as further support for shareholder returns and strategic focus: a $500 million share repurchase authorization was unveiled and management disclosed plans to divest the Hawthorne business. The analyst firm characterized Scotts Miracle-Gro as holding a wide moat in the North American lawn and garden market, grounded in its brand strength and capabilities, and observed that the shares are trading at 14 times 2026 EPS.
Recent quarterly results reinforced the cautious optimism. In Q1 2026 the company reported an EPS of -$0.77, exceeding the forecasted -$1.01, and revenue of $354.4 million, slightly above the $352.28 million analysts had expected. The earnings and revenue beats were followed by a modest pre-market uptick in the stock price, signaling a positive investor response to the quarter’s performance.
Williams Blair emphasized that management’s fiscal 2026 guidance appears achievable and may even be conservative given the current trends in margins, free cash flow generation and the company’s de-leveraging progress. The firm’s view rests on the company’s seasonal plans and ongoing commercial initiatives to sustain momentum.
There were no major merger-and-acquisition announcements in the period, and no significant analyst upgrades or downgrades were reported around the results. Those absences were noted alongside the company’s operational and capital allocation moves as part of the overall assessment of Scotts Miracle-Gro’s near-term outlook.
Summary
Williams Blair reaffirmed an Outperform rating on Scotts Miracle-Gro, pointing to ahead-of-plan shipments, improving margins and confirmed fiscal 2026 guidance. The company announced a $500 million buyback authorization and a Hawthorne divestiture, reported a modest Q1 beat on EPS and revenue, and maintains a long-standing dividend track record with a 4.18% yield.
Key points
- Analyst outlook: Williams Blair retains an Outperform rating, supporting the view that guidance is achievable.
- Capital allocation: Company authorized $500 million in share repurchases and is divesting Hawthorne, signaling a focus on returns and portfolio rationalization.
- Sectors impacted: North American lawn and garden market and equity investors focused on income/total shareholder yield.
Risks and uncertainties
- Revenue trend: Trailing-twelve-month revenue fell 3.93%, which could weigh on growth expectations if the trend continues - relevant to consumer products and retail segments serving lawn and garden.
- Guidance execution: While management reaffirmed fiscal 2026 targets, meeting or exceeding those figures remains contingent on seasonal demand and execution of commercial plans.
- Corporate moves: The Hawthorne divestiture and the sizable buyback program alter capital allocation and balance-sheet dynamics, adding execution and timing risk to the financial outlook.