UPDATE: Stifel Starts Scotts Miracle-Gro (SMG) at Buy
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Stifel analyst W. Andrew Carter initiates coverage on Scotts Miracle-Gro (NYSE: SMG) with a Buy rating and a price target of $220.00.
The analyst comments "With the shares down 28% since early April (S&P 500 +8%), we believe the shares undervalue what we regard as a compelling long-term growth profile, Hawthorne’s standalone potential, and the optionality provided by the strengthened balance sheet. The U.S. Consumer segment sports overwhelming leadership in demographically favorable categories, while we believe Hawthorne is positioned to profitably capitalize on U.S. cannabis category growth. We believe Hawthorne’s growing critical mass provides options for maximizing shareholder value with our sum-of-the parts analysis suggesting $230 per share. With the rapid balance sheet improvement, we estimate $800 million of firepower to execute M&A to enhance either business or return cash to shareholders."
Shares of Scotts Miracle-Gro closed at $183.02 yesterday.
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