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Scotts (SMG) Soars 5.8%: Is Further Upside Left in the Stock?

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Scotts Miracle-Gro (SMG - Free Report) shares ended the last trading session 5.8% higher at $57.96. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.7% loss over the past four weeks.

SMG’s shares rallied after Truist Securities upgraded it to “Buy” from “Hold” with a price target of $70.

This lawn and garden products company is expected to post quarterly earnings of $3.95 per share in its upcoming report, which represents a year-over-year change of +7.1%. Revenues are expected to be $1.5 billion, down 1.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Scotts, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SMG going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Scotts belongs to the Zacks Fertilizers industry. Another stock from the same industry, Yara International ASA (YARIY - Free Report) , closed the last trading session 2.7% lower at $14.77. Over the past month, YARIY has returned 8.4%.

Yara International ASA's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.15. Compared to the company's year-ago EPS, this represents a change of +36.4%. Yara International ASA currently boasts a Zacks Rank of #1 (Strong Buy).


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