JPMorgan analyst Jeffrey Zekauskas downgraded Scotts Miracle-Gro (NYSE: SMG) from Overweight to Neutral with a price target of $67.00 (from $70.00).

The analyst comments: "We expect Scott to pay more for its raw materials in F2027 (ends September) than it is likely to pay for them in F2026. Urea prices, diesel prices, and high-density polyethylene (HDPE) are all likely to be higher in F2027 than in F2026 due to the consequences of the conflict in Iran. We think that Scotts buys about 150kt of urea annually and the urea price, which averaged $422/st over the past year is now $660/ st. The price of diesel, which averaged $3.72/gal over the past year is now $5.37/ gal. The company buys about 30kt (or 65m lbs) of polyethylene, which averaged $843/t and is now $1280/t. We think that Scotts’ raw materials will be about $45- $50m higher on average in 2027 than in F2026. These are not especially large numbers as a base case for a company that reported $440m in adjusted operating profit in F2025 and $3.4b in sales, but they are a headwind. We trimmed our 2027 EPS forecast for Scotts from $4.65 to $4.35, versus our $4.25 estimate for F2026."

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Shares of Scotts Miracle-Gro closed at $67.67 yesterday.