A few weeks ago, we found out that home improvement giant Home Depot (HD) subsidiary SRS Distribution was out to acquire Mingledorff’s. This move looked like a great way to advance Home Depot’s “win the pro” philosophy, and now, the move is complete and official. This move, oddly, did little to improve things for investors, as they sent Home Depot stock sliding modestly in Monday morning’s trading.
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The deal got started in late March, but of course had to jump through its share of hoops to come to ultimate fruition. But with those hoops successfully cleared, Home Depot subsidiary SRS Distribution now owns Mingledorff’s, a major wholesale distributor of heating, ventilation and air conditioning (HVAC) supplies.
Mingledorff’s is a major presence in the southeastern United States, which not only gives Home Depot a boost with the professional market, but also, it provides a major boost to one specific geographic area. Home Depot gets access to a substantial new line of products in turn. Better yet, Home Depot also gets access to a product line that will mostly be used by professionals, as most regular homeowners will not engage in DIY projects around heating and cooling beyond cleaning a filter.
Taking Advantage of Soccer
Meanwhile, with FIFA World Cup season about to fire up in earnest, Home Depot is looking to take advantage of the multinational frenzy to fire up interest in hammers and screws. So Home Depot is teaming up with the Men in Blazers Media Network to help viewers make the connection between soccer and home improvement.
The partnership will feature a branded tour bus that will go from city to city, specifically the cities where World Cup games will be hosted. The bus will act as a traveling studio, and content will be produced therein with Home Depot branding to draw attention to both World Cup events and the home improvement giant.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 17 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 15.7% loss in its share price over the past year, the average HD price target of $420 per share implies 34.25% upside potential.
