William Blair Affirms Buy Stance as Scotts Miracle-Gro Co (SMG) Touts Cannabis Opportunity with Reclassification

The Scotts Miracle-Gro Company (NYSE:SMG) is one of the best fertilizer stocks to invest in. On December 12, William Blair analyst Jon Andersen reiterated a Buy rating on Scotts Miracle-Gro Co (NYSE: SMG), impressed by the company’s 2026 guidance.

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The company has already hinted at consumer sales growth in the low single digits that should lead to expansion in gross margin and a leverage ratio in the 3s. The projections are achievable with potential for further upside, particularly in gross margin improvements. The analysts are also confident the company will reach EBITDA of $700 million by 2028, on the back of sales growth of 2%-3% and an EBITDA margin of 20%.

Meanwhile, on December 18, the company echoed its support for President Donald Trump’s executive order focused on rescheduling cannabis from a Schedule 1 to Schedule III drug. The rescheduling is expected to strengthen the regulated cannabis industry and contribute about $100 billion to the economy. Under the new classification, companies are to pay tax rates aligned with those of other American businesses.

Additionally, the rescheduling will benefit ScottsMiracle-Gro’s Hawthorne Gardening Company subsidiary. The unit supplies nutrients, light, and other products to legal cannabis growing operations. While the unit has experienced declining capital spending from cannabis companies, it will benefit from the rescheduling of cannabis.

The Scotts Miracle-Gro Company (NYSE:SMG) is a leading manufacturer and marketer of branded consumer products for lawn and garden care, offering fertilizers, pesticides, seeds, and gardening supplies for homeowners, as well as a significant business in hydroponic growing supplies.

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Disclosure: None. This article is originally published at Insider Monkey.