The aisles at home improvement giant Home Depot (HD), much like any other hardware store, have often felt laden with purpose. These are places where inspiration lives, as long as you have the cash, the talent, or some combination of both, to realize that potential. But these days, the sentiment is changing a bit, and Home Depot is working to understand this new feeling. Investors remain reasonably confident, as shares notched up fractionally in Tuesday afternoon’s trading.
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Back in July, when Home Depot had its second quarterly earnings report, it noted that traffic in its stores was starting to drop. Granted, there was a gain in overall sales, but many regarded that as a function of higher prices than it was an increase in customers. The small drop in customer count was offset by the rise in prices.
And Home Depot has been fighting against the need to raise prices, working with suppliers and cutting expenses to try and hold the line. But some price bumps were likely inevitable, and the customer—already feeling tapped out after a simple grocery store run—is cutting back accordingly. A recent interest rate drop has helped, of course, but this tepid drop has so far proven little help. So Home Depot is left with rising prices, frightened customers, and a market that is looking increasingly inhospitable for all but the most basic of sales.
Protest After Protest After Protest
And then, a flood of protests fired up, with news out of several cities talking about rallies at Home Depot locations all over, you guessed it, illegal immigration. Multiple events fired up in the last few days, and all of these aimed at a combination of the federal government and Home Depot.
In East Lansing, protesters gathered for the “ICE Out of Home Depot” rally, which looked to “…honor immigrant workers who have been detained by ICE on Home Depot properties.” Pittsburgh saw a similar rally. And finally, Savannah, Georgia saw a rally as part of the “Disappeared in America Weekend of Action,” which focused on—you guessed it again—ICE raids at Home Depot locations.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 19 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 5.43% loss in its share price over the past year, the average HD price target of $446.30 per share implies 17.2% upside potential.
