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The Scotts Miracle-Gro Company (SMG - Free Report) recently stated that it aims to attain a second-quarter net leverage ratio of about 7 times adjusted EBITDA. This will be less than the company's fiscal first-quarter net leverage ratio and its second-quarter maximum of 7.75 times.
As debt reduction and covenant compliance are manageable, net leverage will not only be substantially below the second-quarter maximum and better than the first quarter, but it will also become a less critical metric moving ahead, SMG noted.
In the second quarter, the company generated near-record retail shipments with year-to-date POS units trending at mid-teens percentage growth compared to the last year.
The company now has stronger retail partnerships than before. Free cash flow in the first half of the year exceeded expectations, providing strong support for meeting the remainder of the company's $1 billion free cash flow target in the fiscal 2023 and fiscal 24 period.
Shares of SMG have lost 2% over the past year compared with an 19.1% decline of its industry.
Image Source: Zacks Investment Research
The company, on its fiscal first-quarter earnings call, reaffirmed its fiscal 2024 guidance, except for Hawthorne net sales, which are undergoing strategic changes. While the full impact on net sales is uncertain, Hawthorne aims for positive cash flow this year, it noted. The company's main objective is to strengthen its balance sheet, targeting $575 million adjusted EBITDA and $560 million free cash flow to achieve $1 billion in free cash flow over two years.
The Scotts Miracle-Gro Company Price and Consensus
Better-ranked stocks in the basic materials space include Denison Mines Corp. (DNN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) .
Denison Mines sports a Zacks Rank #1 (Strong Buy). DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 113.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 85.1% in the past year.
The Zacks Consensus Estimate for Ecolab current year earnings is pegged at $6.43 per share, indicating a year-over-year rise of 23.4%. ECL, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied roughly 35.2% in the past year.
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ScottsMiracle-Gro (SMG) Issues Fiscal Second-Quarter Updates
The Scotts Miracle-Gro Company (SMG - Free Report) recently stated that it aims to attain a second-quarter net leverage ratio of about 7 times adjusted EBITDA. This will be less than the company's fiscal first-quarter net leverage ratio and its second-quarter maximum of 7.75 times.
As debt reduction and covenant compliance are manageable, net leverage will not only be substantially below the second-quarter maximum and better than the first quarter, but it will also become a less critical metric moving ahead, SMG noted.
In the second quarter, the company generated near-record retail shipments with year-to-date POS units trending at mid-teens percentage growth compared to the last year.
The company now has stronger retail partnerships than before. Free cash flow in the first half of the year exceeded expectations, providing strong support for meeting the remainder of the company's $1 billion free cash flow target in the fiscal 2023 and fiscal 24 period.
Shares of SMG have lost 2% over the past year compared with an 19.1% decline of its industry.
Image Source: Zacks Investment Research
The company, on its fiscal first-quarter earnings call, reaffirmed its fiscal 2024 guidance, except for Hawthorne net sales, which are undergoing strategic changes. While the full impact on net sales is uncertain, Hawthorne aims for positive cash flow this year, it noted. The company's main objective is to strengthen its balance sheet, targeting $575 million adjusted EBITDA and $560 million free cash flow to achieve $1 billion in free cash flow over two years.
The Scotts Miracle-Gro Company Price and Consensus
The Scotts Miracle-Gro Company price-consensus-chart | The Scotts Miracle-Gro Company Quote
Zacks Rank & Key Picks
SMG currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Denison Mines Corp. (DNN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) .
Denison Mines sports a Zacks Rank #1 (Strong Buy). DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 113.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 85.1% in the past year.
The Zacks Consensus Estimate for Ecolab current year earnings is pegged at $6.43 per share, indicating a year-over-year rise of 23.4%. ECL, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied roughly 35.2% in the past year.