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On Monday, Stifel analysts maintained a Buy rating and a $70.00 price target on shares of Scotts Miracle-Gro (NYSE:SMG), which currently trades at $55.44. The stock has seen significant volatility, with analyst targets ranging from $55 to $100, according to InvestingPro data. The decision follows comments made by SMG Chairman and CEO Jim Hagedorn during a recent appearance on Mad Money. Hagedorn did not provide a formal guidance update but expressed optimism, citing year-to-date (YTD) point-of-sale (POS) trends that remained roughly flat in dollar terms but showed a double-digit increase in units, with April performing notably better. The company maintains a strong dividend tradition, having paid dividends for 21 consecutive years, with a current yield of nearly 5%.
The robust unit growth comes despite challenges such as unfavorable weather conditions in January and February, a particularly cold second week of April, and a later Easter, which impacted the start of the lawn and garden season. Tractor Supply Company (NASDAQ:TSCO) reported that their calendar first-quarter 2025 lawn and garden sales were down in the low double digits, pointing to a delayed season onset.
Stifel’s analysis suggests that the pricing dynamics, which diverge from the flat guidance to a double-digit decrease, could stem from increased retailer support. The firm views the update from Hagedorn positively, especially considering the strong unit growth against the backdrop of the aforementioned challenges.
The analysts anticipate that Scotts Miracle-Gro will reiterate its full-year 2025 guidance during the second-quarter 2025 earnings report, with the expectation that 60% of the company’s POS for the year will have been achieved by then. May is seen as a critical month for the company’s performance. While currently unprofitable over the last twelve months, InvestingPro analysis suggests the company is undervalued, with analysts predicting a return to profitability this year. For deeper insights into SMG’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Scotts Miracle-Gro has announced a quarterly cash dividend of $0.66 per share, which will be distributed to shareholders on June 6, 2025. This decision underscores the company’s commitment to providing value to its shareholders and reflects its financial health. In terms of analyst ratings, Jefferies upgraded Scotts Miracle-Gro’s stock from Hold to Buy, although the price target was slightly reduced to $69.00. Similarly, Truist Securities also upgraded the stock to Buy, maintaining a price target of $70.00, citing confidence in the company’s market positioning. Stifel has also shown optimism, upgrading the stock to Buy and setting a price target of $70.00, while noting the company’s attractive dividend yield and potential for earnings recovery. Despite facing macroeconomic challenges, analysts from these firms express confidence in Scotts Miracle-Gro’s ability to navigate market pressures and achieve robust earnings growth. These recent developments highlight the company’s strategic efforts to maintain investor confidence and its potential for future financial performance.
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