So while the mood at home improvement giant Home Depot (HD) is a bit hesitant, as it waits for customers to start feeling confident enough about the economy to take out loans for major projects again, Home Depot is gearing up on another front that could prove helpful: delivery speed. Home Depot recently revealed that its delivery speeds are now at their fastest level ever. When the customer finally does start spending again, Home Depot will be ready. Investors were skeptical, though, and sent shares slipping fractionally in Monday afternoon’s trading.
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Home Depot seems to understand one thing very well: brick-and-mortar has one major advantage over online shopping these days: immediacy. When people shop online, they also end up in line for a long wait, as the item is shipped to their home in a process that can take several days or even weeks. But Home Depot is putting a lot of investment into faster shipping and order fulfillment that is starting to pay off.
A combination of “…dedicated associates and machine learning…” fuels the engine that gets deliveries out the door faster and into customers’ hands. The machine learning is determining whether to ship products from a store or from a fulfillment center, speeding up the process, and dedicated associates who only handle order fulfillment trim further time. This in turn is fueling a small spending boom. Home Depot noted that it is seeing a “…double-digit increase in spending from customers who utilize faster delivery options…” reports noted.
Still Tops With Immigration Enforcement
Backlash over Home Depot’s newfound status as a key location for immigration enforcement efforts does not seem to be stopping the process much. In fact, reports note, Home Depot locations are now considered “…prime locations for immigration enforcement,” noted an NBC News report. In fact, despite the recent upswing in arrest actions being staged at Home Depot locations, this is not stopping illegal immigrants from showing up in the Home Depot parking lots.
Just last Friday, another two Home Depot parking lots in the Los Angeles area were hit, and brought not only immigration agents, but also protesters. With tariffs keeping the price of building materials high, some are looking for a way to save on labor and installation. Day laborers make a handy option, and thus, they show up, despite the risks.
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 10.34% rally in its share price over the past year, the average HD price target of $445.14 per share implies 8.87% upside potential.
