Home improvement giant Home Depot (HD) may be about to face a very serious change in the way it does business. That change involves a potential surge in the federal minimum wage rate that would mirror the change some individual states have made. This is posing serious issues for retailers, and Home Depot is no exception. Investors are clearly concerned as well, and Home Depot shares were down nearly 2.5% in Monday morning’s trading.
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Legislation was recently introduced by representatives Delia Ramirez and Analilia Mejia that would ultimately see the federal minimum wage raised to $25 per hour. It would also eliminate all wages beneath that. Large employers like Home Depot would ultimately need to raise their own wages by 2031, reports noted. Plus, the federal minimum wage would be continually updated to reflect the national median wage. The federal minimum wage would constantly be two-thirds of the national median wage.
Saru Jayaraman, president of One Fair Wage, noted, “Across the country—from California to the Midwest to the East Coast—workers are organizing for $25 and $30 because that is what it takes to live. The polling shows that this is not just popular, it’s necessary. And ‘for all’ means exactly that: no worker left behind. This is what it looks like when politics begins to catch up to reality—and when democracy delivers real improvements in people’s lives, it becomes tangible.”
Swap Meet Gone Wrong For Home Depot
Meanwhile, a Los Angeles County swap meet turned into a serious problem for Home Depot. Reports noted that two suspects were allegedly involved in a “fencing” operation that took stolen goods from Home Depot and used them as fodder for the swap meet.
The report further noted that, when police raided the suspects’ home, there was over $600,000 worth of merchandise found therein. The merchandise was subsequently recovered. However, the report also noted that the specific Home Depot locations that were stolen from were never identified, nor were the individual shoplifters who supplied the tools in question.
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 three Holds assigned in the past three months, as indicated by the graphic below. After a 10.46% loss in its share price over the past year, the average HD price target of $425.06 per share implies 34.77% upside potential.
