William Blair & Company initiated research coverage of The Scotts
Miracle-Gro Company (NYSE:SMG) ($28.77), the largest manufacturer and
marketer of do-it-yourself lawn and garden care products in the world,
with an Outperform rating and company profile of Core Growth.
Analyst Jon Andersen estimated that the company would earn $2.08 in
fiscal 2008, $2.35 in fiscal 2009, and $2.65 in fiscal 2010.
“Scotts represents one of the more attractive
long-term growth opportunities among midcap stocks in the consumer
products industry owing to its clear leadership position in a healthy
market with positive demographic underpinnings; sustainable competitive
advantages in commitment to innovation, brand support, and in-store
execution; and experienced, talented management team,”
Andersen said.
“While we acknowledge 2008 should prove to be
an investment year for Scotts, we believe the shares represent an
attractive long-term investment opportunity,”
he added. “Furthermore, given our outlook for
EPS acceleration beginning in fiscal 2009 (September), we encourage
longer-term investors to take advantage of near-term uncertainties
related to 1) the consumer environment, 2) a weather-driven slow start
to the lawn and garden season, and 3) incremental 2008 investment to
enhance future growth and profitability.”
William Blair & Company, L.L.C. has received compensation for investment
banking services from the company within the past 12 months, or expects
to receive or intends to seek compensation for investment banking
services in the next 3 months.
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