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Analyzing Scotts Miracle-Gro’s Newly Added Risk Factor

Scotts Miracle-Gro (SMG) is a well-known manufacturer of garden goods, such as plant nutrients and seeds.

Let’s take a look at the company’s financials and understand what has changed in its key risk factors that investors should know. (See Insiders’ Hot Stocks on TipRanks)

Scotts Miracle-Gro Risk Factors

According to the new TipRanks Risk Factors tool, Scotts Miracle-Gro’s main risk categories are Finance & Corporate and Production, which account for 24% each of the total 34 risks identified.

According to Scotts Miracle-Gro, the company’s transportation networks may be disrupted. Increased congestion, a lack of transportation capacity, higher fuel costs, labor disputes, and other issues might all contribute to these disruptions. These setbacks might lead to lower sales or higher costs, affecting the company’s margins and profitability.

On a brighter note, the overall sector average for the Finance & Corporate risk factor is 34.6%.

Q4 Financial Results

The firm recorded $4.93 billion in sales in Q4, up 19% year-over-year. The non-GAAP net loss was $0.82 per share versus $0.06 per share in the year-ago quarter.

During the quarter, the company also announced its intention to repurchase $300 million shares in 2022.

Wall Street’s Take

Following the Q4 earnings announcement, Berenberg Bank analyst Rudy Yang reiterated a Buy rating on Scotts Miracle-Gro stock and a price target of $232.

Yang writes, “Overall, while Scotts continues to experience margin headwinds, we continue to believe the long-term outlook for the company remains strong.”

Consensus among analysts is a Strong Buy based on five unanimous Buy ratings in the last three months. The average SMG price target is $202.60, reflecting a potential 12-month upside of 23.2% from current levels. 

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