We know that there has been some controversy of late surrounding plants at home improvement giant Home Depot (HD). But it turns out there is another problem with plants as one of its major suppliers, Bell Nursery, shut down one of its key locations. The news did not sit well with investors, as shares slipped fractionally in Thursday afternoon’s trading.
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Bell Nursery shut down its location in Elkridge, which in turn left employees with the choice to either take a severance package or get transferred to new locations. The move hit 42 employees, reports noted, and 15 of them took the severance packages. The other 27, meanwhile, moved to other locations.
Since Bell Nursery supplies plants and flowers for Home Depot’s Central Garden & Pet operations, reports noted, this may have some impact on some plants’ availability. Central Garden & Pet vice president of investor relations and corporate sustainability Friederike Edelmann noted that the move was thanks to a “…cost and simplicity initiative.” Reports note that Bell Nursery has moved from the Elkridge operation to a bigger shop in Kentucky.
Better than Lowe’s?
Meanwhile, competition is still hitting Home Depot as hard as ever, and some reports suggest that one of Home Depot’s main rivals, Lowe’s (LOW), could have an unexpected advantage. Analysts at Oppenheimer recently noted that Lowe’s has something of an advantage right now in that its share price is a bit lower than Home Depot’s.
Since both are operating in the same market, they are likely to be hit by the same factors. Recovery in the housing market is fairly certain to lag behind interest rate cuts, and with further cuts proving a questionable outcome with some political wrangling as well, a housing market recovery is likely to take its time in coming.
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 3.54% loss in its share price over the past year, the average HD price target of $446.30 per share implies 12.74% upside potential.
