“Uncertainty Continues to Pressure…” Home Depot Stock (NYSE:HD) Slides as Lowe’s Moves Ahead

Bad news for home improvement giant Home Depot HD -2.67% ▼ emerged as its primary rival, Lowe’s LOW -2.17% ▼ , managed to pull ahead of its rival in one key metric: comparable-store sales. While both are suffering under the same larger economic conditions, Lowe’s seems to be drawing in more customers who are actually willing to spend. This hit Home Depot hard, as shares slid nearly 3% in Monday morning’s trading.

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Foot traffic turned out to be a positive for Lowe’s, though both Lowe’s and Home Depot saw foot traffic decline. Lowe’s same-store visits were down 2.2% in October, but were up 2.9% in November, only to drop another 1.5% in December. Home Depot, meanwhile, lost 1.5% in October, gained 3% in November, and lost 0.5% in December. But despite the comparatively lighter losses at Home Depot, Lowe’s got more out of the customers that did show up. Comparable-store sales were up 1.3% for Lowe’s, but only up 0.3% at Home Depot.

Lowe’s stepped up its MyLowe’s Rewards app use to deliver better deals, reports note, and pushed artificial intelligence (AI) applications a little harder as well. But both Lowe’s and Home Depot have been warning investors about issues in the housing market, especially those that prevent customers from enthusiastically taking on debt to carry out large-scale renovation projects. This growing concern from consumers is driving a loss at both stores overall.

More Protests

Meanwhile, Home Depot continues to suffer from its perceived connections to the Immigration and Customs Enforcement (ICE) agency. Protesters throughout San Diego County recently turned out for protests at over a dozen Home Depot locations in the county. The protesters demanded that Home Depot not only condemn ICE activities that take place at Home Depot locations, which it could do, but also stop immigration enforcement from operating, which it really cannot.

Home Depot has pointed out on numerous occasions that it is legally barred from stopping immigration enforcement activities, so one of the protesters’ conditions will likely never be satisfied. The condemnation part, though, does seem to be within Home Depot’s right to carry out. Though how much such a move would accomplish is, ultimately, unclear.

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 2.3% loss in its share price over the past year, the average HD price target of $421.60 per share implies 13.43% upside potential.

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