William Blair Affirms Buy Stance as Scotts Miracle-Gro Co (SMG) Touts Cannabis Opportunity with Reclassification

Group 1 - Scotts Miracle-Gro Company (NYSE: SMG) is recognized as a strong investment opportunity in the fertilizer sector, with a Buy rating reaffirmed by William Blair analyst Jon Andersen based on the company's promising 2026 guidance [1] - The company anticipates consumer sales growth in the low single digits, which is expected to enhance gross margins and maintain a leverage ratio in the 3s, with achievable projections and potential for further gross margin improvements [2] - Analysts project that Scotts Miracle-Gro will achieve an EBITDA of $700 million by 2028, driven by sales growth of 2%-3% and an EBITDA margin of 20% [2] Group 2 - The company supports President Trump's executive order to reschedule cannabis from a Schedule 1 to Schedule III drug, which is expected to bolster the regulated cannabis industry and contribute approximately $100 billion to the economy [3] - The rescheduling is anticipated to benefit Scotts Miracle-Gro's subsidiary, Hawthorne Gardening Company, which supplies products to legal cannabis operations, despite previous declines in capital spending from cannabis companies [4] - Scotts Miracle-Gro is a leading manufacturer and marketer of branded consumer products for lawn and garden care, including fertilizers, pesticides, seeds, and hydroponic growing supplies [5]