A perfect storm may be brewing for home improvement giant Home Depot (HD) this year, as the confluence of holiday shopping season and ongoing ICE raids hits. The two events are delivering a potential gut punch to Home Depot’s bottom line as a grassroots boycott effort mounts up. Investors did not take the news well either, and shares slipped nearly 2% in Monday morning’s trading.
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The effort is known as “We Ain’t Buying It,” and is apparently being led by a collective of grassroots organizations looking to cut off funding to what it believes are organizations in mid-misbehavior. Home Depot is on the hook here, as are both Target (TGT) and Amazon (AMZN). The collective claims the businesses “…caved to President Donald Trump and reneged on pledges to support diversity, equity and inclusion (DEI) programs.
With shoppers already planning to pare back their holiday spending by an average of 5% as compared to this time last year, this could be a bit harder blow than normally expected. The collective is calling on shoppers to patronize small shops, local businesses, and “…Black, minority and immigrant-owned businesses.”
The Elephant in the Room
Meanwhile, the connection between Home Depot and ICE is continuing to do damage, with this latest boycott effort just the tip of the iceberg. Home Depot has mostly chosen a battle plan of silence, making it clear that it is not consulted, and thus, is not involved.
Customers—as we just saw—are not taking this lightly, however. In fact, there is a growing concern that Home Depot should, perhaps, take something of a stand against the ICE raids that use Home Depot parking lots as live traps. But Home Depot’s response to most anyone who asks, which contains the phrase, “We’re required to follow all federal and local rules and regulations in every market where we operate.” tends to shut discussion down before it can start. They are, after all, indeed required to do such. What is left?
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 20 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 9.11% loss in its share price over the past year, the average HD price target of $446.43 per share implies 21.59% upside potential.
