NBC’s Jim Cramer on Thursday told investors to resist the urge to add ScottsMiracle-Gro to their portfolios, despite the stock’s low valuation.
“Historically, this is a great time of year for anything garden related because it’s planting season, and Scotts is a name that we used to get a ton of questions about. … But, over the past thirteen months, these shares have been obliterated,” the “Mad Money” host said.
“While ScottsMiracle-Gro might seem cheap on a price to earnings basis, the problem is that the earnings forecast keeps coming down … and management doesn’t have a handle on how bad it’s going to get,” he later added.
ScottsMiracle-Gro stock fell 6% on Thursday. The company reported better-than-expected earnings in its previous quarter two days before.
JPMorgan upgraded ScottsMiracle-Gro to overweight from neutral on Wednesday, pointing to the stock’s valuation, high margins and market leadership. Stifel downgraded the stock from overweight to hold.