Advertising is, of course, vital at home improvement giant Home Depot (HD). Letting customers know about new sales and new products available, or just reminding them that you are still here, is a function that keeps businesses running. But Home Depot is shaking up its advertising plans by dismissing its main ad agency, BBDO, and instead looking to bring that work in-house. The move did not sit well with investors, however, who sent shares slipping fractionally in Friday morning’s trading.
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Reports note that this was not exactly news to BBDO, who had seen its work with Home Depot fall off gradually over some time anyway. Home Depot had been paring back BBDO’s connection gradually, and had always been planning to bring the ad work in-house. Neither side would comment on the issue, so it is unclear whether Home Depot will look for another agency to augment the work or bring the whole project in-house after all.
Interestingly, Home Depot is not the first agency customer to throw over agencies and bring the work in-house instead; T-Mobile (TMUS) recently cut off a lot of its agency work with Dentsu Creative to instead bring the work to internal operations. With these two making such moves, will more corporate ad buyers follow suit?
There’s Too Much Snow on the Roof
Normally, shoppers turn to Home Depot to get rid of the snow in their own yards, driveways, or what have you. But for one Massachusetts Home Depot, in Watertown near Boston, a Home Depot was actually closed down due to excessive snow.
The Home Depot ended up with far more snow on its roof than normal, and that actually caused some damage to the roof itself. This led Home Depot to shut down the store “…out of an abundance of caution,” according to Home Depot reps. This left customers in something of a lurch, as they showed up at Home Depot looking for supplies for their own repair jobs and found the store shut down. This is doubly unfortunate for Home Depot, as it misses an opportunity to make sales in an environment where there would be more of them to make than normal.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HD stock based on 17 Buys, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 9.75% loss in its share price over the past year, the average HD price target of $407.67 per share implies 10.36% upside potential.
