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What's in Store for Scotts Miracle-Gro (SMG) in Q2 Earnings?

Zacks Equity Research

The Scotts Miracle-Gro Company SMG is set to release second-quarter fiscal 2019 results on May 1, before the opening bell.

The stock has rallied 35.6% year to date, outperforming the industry’s 6.3% rise.

Few of the Factors at Play

Scotts Miracle-Gro is witnessing its U.S. retailers getting engaged for the lawn and garden season. During first-quarter fiscal 2019 earnings call, the company stated that it expects to see positive top-line growth in the fiscal second quarter, provided run rate exiting January 2019 sustains.

The company expects the trends in the Hawthorne segment to be positive on a year-over-year basis. Scotts Miracle-Gro is also expected to benefit from the synergies of the Sunlight Supply acquisition in the to-be-reported quarter.

What do the Estimates Say?

The Zacks Consensus Estimate for fiscal second-quarter revenues is currently pegged at $1,161 million, suggesting an increase of 14.6% year over year.

The Zacks Consensus Estimate for fiscal second-quarter sales in the Hawthorne segment is currently pegged at $112 million, calling for an increase of 167.9% from the year-ago quarter's figure.

Zacks Model

Our proven model does not show that Scotts Miracle-Gro is likely to beat in the estimates to-be-reported quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Earnings ESP: Earnings ESP for Scotts Miracle-Gro is 0.00%. The Most Accurate Estimate and the Zacks Consensus Estimate are both currently pegged at $3.42. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Scotts Miracle-Gro currently carries a Zacks Rank #2, which when combined with a 0.00% ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or #5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

The Scotts Miracle-Gro Company Price and EPS Surprise

The Scotts Miracle-Gro Company Price and EPS Surprise | The Scotts Miracle-Gro Company Quote

Stocks Poised to Beat Estimates

Here are some companies in the same space you may want to consider as our model shows that they have the right combination of elements to beat estimates.

Intrepid Potash, Inc IPI has an Earnings ESP of +25.00% and carries a Zacks Rank #2.

Ingevity Corporation NGVT has an Earnings ESP of +6.77% and carries a Zacks Rank #3.

Ternium S.A. TX has an Earnings ESP of +6.21% and carries a Zacks Rank #3.

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