Home improvement giant Home Depot (HD) has been the center of controversy lately, mostly thanks to the frequency of Immigration and Customs Enforcement (ICE) raids on its parking lots, looking for illegal immigrants in the supply of day laborers in its parking lots. Formal responses have been in short supply of late, and it seems investors might be getting a bit annoyed. Home Depot shares were down nearly 1.5% in Monday morning’s trading.
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Home Depot’s lack of formal response has been somewhat irksome to observers, though its ability to respond is somewhat limited. The official response has generally focused on a lack of knowledge of or connection to the raids. Calls for Home Depot to denounce the raids publicly, meanwhile, are largely ignored.
Home Depot also made it clear, reports noted, that day laborers are not part of its business model, but there does seem to be tangible benefit. Chris Newman, who serves as the legal director of the National Day Labor Organizing Network, noted, “In general, day laborers love Home Depot, and Home Depot’s bottom line loves day laborers.” Essentially, Home Depot made a substantial part of its strategy focused around the do-it-yourselfer, and those people generally need help, whether it is lifting and carrying, or just holding something down long enough to sink a nail in. Day labor became an excellent way to fill in that gap.
A Little Less Love
But those day laborers may find that love a little too perilous to be of much use. Recently, a report noted that a Home Depot in North Hollywood found itself hit by a raid as federal agents descended on the parking lot therein around 9:20 AM on Friday. The agents were on scene for about 15 minutes, reports noted, and several men were seized.
This may actually be part of a larger thrust, as reports noted similar raids that took place in Chino and Pomona only days prior. Though those reports noted that federal agents are now expanding their raids to car washes as “…Home Depots aren’t an easy target anymore.”
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HD stock based on 19 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 1.21% rally in its share price over the past year, the average HD price target of $446.30 per share implies 10.34% upside potential.
