JPMorgan upgrades Scotts Miracle-Gro on valuation

JPMorgan Chase & Co. analyst Jeffrey J. Zekauskas on Wednesday upgraded shares of Scotts Miracle-Gro Co. SMG, +8.16% to overweight from neutral on the basis of the stock's lower valuation after a 54% drop in the past year. He reduced his price target on the stock to $130 a share from $150 a share. Zekauskas said the stock is now trading at 2018 levels when the company was earning about $3.75 a share in annual profit compared to roughly $7 a share expected for 2022. "We think these current trading multiples are inexpensive for a consumer products leader," he said. "There is nothing particularly working in Scotts' favor at this juncture, especially the cannabis related businesses of Scotts." Shares of Scotts Miracle Gro are down 34.2% in 2022 compared to a drop of 12.4% by the S&P 500 SPX, +0.14%.