Home improvement giant Home Depot (HD) has increasingly fallen prey to political matters lately, and the issues surrounding it and illegal immigration are dragging on its overall outlook. A recent protest hit a Home Depot location in Charlotte, North Carolina recently, but investors are starting to take these protests in stride. Home Depot shares were up fractionally in Thursday morning’s trading.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
The protests brought “dozens” of people, reports noted, and even featured a former mayor of Charlotte, Jennifer Roberts. Roberts declared, “We are here to support the immigrant community. We know they’re an integral part of our economy, education, culture, and growth.” ICE agents recently descended on Charlotte in an operation known as “Charlotte’s Web,” which reportedly landed 130 arrests.
Apparently, the Home Depot was chosen as the site for the protest not because of previous connections, Roberts noted, but rather because yard workers and construction workers alike turn to Home Depot for materials purchases. The fact that it was also, as Roberts noted, “…a place where ICE agents gather” likely also had something to do with it. The protests were echoed throughout Charlotte, as students walked out of classes in support of not pursuing illegal immigration arrests.
“Homeowner Fatigue”
One point that came out of Home Depot’s recent earnings report was the notion of “homeowner fatigue,” the idea that even Home Depot’s somewhat more affluent customer base—the homeowners—may be starting to feel a drag on their purchasing power. With fewer homeowners taking on renovation projects—which usually require loans at interest rates that are still unusually high—it is not much surprise that those homeowners would slow down a bit.
Granted, projects are still carrying on, every day. But with the higher earners that own homes starting to pare back, it is little surprise that the idea is starting to drag on Home Depot’s bottom line as well. Throw in the fact that those who are engaging in projects are trading down for lower-cost alternatives and the picture gets that much grimmer.
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, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After an 18.5% loss in its share price over the past year, the average HD price target of $411.55 per share implies 23.14% upside potential.
