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Investing.com -- Truist Securities upgraded Scotts Miracle-Gro to “Buy” from “Hold” maintaining a price target of $70, as it sees a stabilized lawn and garden market, resilience to macroeconomic pressures, and an attractive valuation.
The U.S. lawn and garden sector experienced sharp demand swings during and after the COVID-19 pandemic but has now returned to more predictable levels, according to Truist.
The firm expects the industry to grow at a low-to-mid-single-digit pace over the next three to five years, supported by millennial household formation.
While consumer products firms have reported softer spending in early 2025, Truist sees minimal impact on Scotts Miracle-Gro, as winter months contribute less than 10% of its full-year consumer sales.
With the key March-June selling season ahead, the firm believes demand stability will support the company’s financial performance.
Additionally,Truist sees potential tailwinds from a weaker consumer environment, noting that historically, economic uncertainty shifts spending toward at-home activities, benefiting categories like lawn and garden.
Despite a 17.3% decline year-to-date, compared to the Consumer Staples Select Sector SPDR ETF’s 3.9% gain,
Truist views Scotts Miracle-Gro’s underperformance as a short-term reaction to macro concerns. With pricing stability for the first time in five years and favorable seasonal dynamics ahead, the firm believes the stock is positioned for a rebound.
Investors will now watch whether Truist’s normalization thesis holds amid broader economic pressures. If discretionary spending remains weak, even traditionally resilient categories may face headwinds.