Home improvement giant Home Depot (HD) recently made a big move to buy one of its key suppliers, and integrate its operations into Home Depot’s own. This was considered a big move for its efforts in the professional builder sector, and some even wonder if it works as a move to protect against tariffs. The move did not seem to do much for shareholders, though. Shares of Home Depot were down modestly in Tuesday afternoon’s trading.
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Home Depot has done a fair job of sourcing its material in the United States. A little over half of its supplies, reports note, come from domestic sources. But that leaves a little under half that is not, and a lot of that sourcing is focused on the pro builder market. And with the pro builder market serving as the company’s “growth engine,” addressing mounting tariffs in the market is key to preserving its margins in a sector Home Depot increasingly counts on.
For Home Depot to own its suppliers, reports note, provides improvements in supply reliability as well as improved costs. With these two factors running on all cylinders, the end result is a stronger ecosystem, and likely better returns. In fact, reports note, other retailers are starting to follow suit, owning their supply chains to improve access and make things work better. It might even help to address some of the points that contractors have expressed concerns about previously.
Dogs Just Love Home Depot
Remember when we talked about the Cane Corso dog that went wandering the Home Depot aisles, drawing smiles and gasps as this massive dog followed his owner about his day? Turns out that is not the only Home Depot shaggy dog tale, even if this particular dog is not so shaggy.
This story features Duke, a one-year-old Golden Retriever who went to Home Depot and took a particular liking to a lawn decoration. No, he did not start chewing Skelly’s leg bone. Rather, Duke found a small statue of a Golden Retriever wearing a ghost costume. Duke pointed out the decoration, encouraging his owner to pick it up. Now, Duke often stands near the statue, looking oddly similar.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 18 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 13.23% rally in its share price over the past year, the average HD price target of $445.14 per share implies 7.36% upside potential.
