A Fresh Look at Scotts Miracle-Gro (SMG) Valuation After Major $2 Billion Credit Facility Restructuring

Scotts Miracle-Gro has just finalized a significant financial restructuring, securing $2.0 billion in senior secured loan facilities through its Seventh Amended and Restated Credit Agreement. This move replaces a previous $2.5 billion facility and signals a strategic pivot for the company.

See our latest analysis for Scotts Miracle-Gro.

The recent credit agreement comes shortly after Scotts Miracle-Gro's expanded stadium partnership and a challenging year for shareholders. While a sharp 4.33% jump in the latest session suggests renewed optimism around its restructuring efforts, the one-year total shareholder return remains deep in negative territory at -23.54%. Momentum has struggled to sustain itself over the longer term, as five-year total returns continue to lag behind broader market benchmarks.

If this kind of financial pivot has you searching for other compelling market moves, now is a smart time to uncover fast growing stocks with high insider ownership.

With the stock currently trading at a significant discount to analysts' price targets but still facing persistent headwinds, the key question is whether Scotts Miracle-Gro represents an overlooked bargain or if the market has already accounted for all future growth prospects.

Most Popular Narrative: 24.8% Undervalued

Market expectations are shifting after the restructuring, with the most widely followed narrative setting fair value well above the recent closing price of $55.41. This valuation sets the stage for deep debate among both bulls and bears after a tumultuous year.

Significant ongoing investments in supply chain technology, automation, and process efficiencies are unlocking approximately $75 million in cost savings for fiscal '25 and another $75 million planned for '26/'27. These savings are directly driving gross margin recovery (aiming for 35% or higher), boosting EBITDA, and improving long-term net margins.

Read the complete narrative.

Curious about the projections driving this headline valuation? The real story is built around targets for profit growth and ambitious margin recovery. Want to see which pivotal assumptions help bridge current market skepticism and the premium price target? Discover the logic and the tension inside the full narrative.

Result: Fair Value of $73.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent challenges remain, since changing consumer preferences and reliance on major retailers could disrupt projections and weigh on margin recovery.

Find out about the key risks to this Scotts Miracle-Gro narrative.

Build Your Own Scotts Miracle-Gro Narrative

If you see things differently or would rather analyze the numbers yourself, you can craft your own perspective in just a few minutes. So why not Do it your way?

A great starting point for your Scotts Miracle-Gro research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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