It was likely only a matter of time until home improvement giant Home Depot (HD) was forced to capitulate in terms of pricing, particularly on imported items. And now, tariffs are going to send at least some prices up on hardware and other goods there. Investors took the news oddly well, sending Home Depot shares up over 3% in Tuesday afternoon’s trading.
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Following the quarterly results reporting earlier today—which likely had quite a bit more to do with Home Depot’s stock price gains—Richard McPhail, Home Depot’s chief financial officer, noted that some prices were going to have to go up at Home Depot thanks to the taxes on imports. Some imported goods, McPhail noted, saw their tariff rates go up substantially even from just last quarter. So there needed to be price increases accordingly.
However, McPhail noted, not every price was going to go up. McPhail told shoppers to look for “…modest price movement in some categories…” He also noted that the price hikes would not be “…broad based.” With just under half of Home Depot’s inventory coming from suppliers outside the United States, that could send quite a few prices up. But Home Depot has been working to diversify its supply chain farther to reduce the dependence on foreign producers.
Just What Do They Know?
Then, in a surprise move, Home Depot found itself the target of a new class-action lawsuit. Started by Benjamin Jankowski, the suit alleges that Home Depot “…collects biometric data without consent.” Such a move would violate the Illinois Biometric Information Privacy Act (BIPA), and since the suit was filed in Illinois federal court, it would seem to qualify.
The suit alleges that Home Depot used facial recognition scanning, a development first announced back in August 2023 when Home Depot revealed it was using “computer vision” in stores. Home Depot expanded that development, such that, by May 2024, it was using facial recognition at all its self-checkout stations. And without publicly-available retention policies and a lack of informed written consent, Home Depot effectively violated the BIPA. Home Depot did not comment in response at last report.
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 7.47% rally in its share price over the past year, the average HD price target of $430.68 per share implies 5.98% upside potential.
