There’s a specific stock poised to benefit from the growing marijuana market, according to JP Morgan, but it might not be the one you’d expect.
The firm recently raised its target price for Scotts Miracle-Gro (NYSE:SMG) from $70 to $85, citing an expanding hydroponics market as a driver for growth. As per an article from Barrons, JP Morgan analyst Jeffrey Zekauskas believes the company is shifting its focus to the hydroponics market.
While Zekauskas notes that hydroponics revenues currently represent only about 6 percent of the company’s total business, he sees the marijuana space stoking growth in this area.
“The hydroponics market taps into marijuana demand and the company now has a growth option that we think an investor is able to capture for about the price of the traditional business,” he stated in a note.
Scotts was trading up 3.72 percent on Monday at $82.52 per share. The company is up 28 percent so far in 2016.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.