UBS Revises Scotts Miracle-Gro (SMG) Outlook as Consumer Staples Pressures Persist

Core Insights - The Scotts Miracle-Gro Company (NYSE:SMG) is recognized as one of the best dividend stocks to buy in February [1] - UBS has raised its price target for Scotts Miracle-Gro from $61 to $66 while maintaining a Neutral rating, indicating ongoing pressures in the consumer staples sector but potential improvement in fundamentals by 2026 [2] Company Overview - Scotts Miracle-Gro specializes in lawn care products and sells directly to consumers, which benefited the company during the pandemic when demand for home projects surged [3] - The company's Hawthorne unit, linked to the cannabis market, has faced challenges as the cannabis sector has cooled off [3] Business Restructuring - Management is implementing a restructuring effort to streamline operations and eliminate lower-margin product lines, aiming for growth in 2024 with improved margins [4] - The U.S. consumer business reported a 6% increase in sales by the end of the year, with profits continuing to improve in 2025 despite overall sales flattening [4] Market Position - Scotts Miracle-Gro remains the leading brand in at-home lawn care, providing a solid foundation for long-term growth [5]