Home Depot's (HD) management appears confident that it can weather the impact of tariffs on the business without the need to raise prices dramatically, Truist said in a Tuesday note.

With over half of its sourcing from the US and given the scope of leverage with vendors, Home Depot appears to be "very well positioned" to navigate the tariff environment, Truist analysts said.

The analysts also said they continue to believe "it's a matter of "when" not "if" for sales growth to materially accelerate."

Despite having a slow start to Q1, the company's comparable sales were able to modestly beat expectations as they accelerated by 500 basis points, Truist said.

Home Depot on Tuesday reported fiscal Q1 adjusted earnings of $3.56 per diluted share, down from $3.67 a year earlier, which missed the $3.60 per share consensus of analysts polled by FactSet.

Net sales for the quarter ended May 4 were $39.86 billion, up from $36.42 billion a year earlier. Analysts surveyed by FactSet expected $39.3 billion.

The company also continues to expect fiscal 2025 adjusted EPS to decline about 2% from $15.24 a year earlier, with sales growth pegged at about 2.8%.

Truist reiterated its buy rating on the stock and raised its price target to $417 from $393.

Price: 376.15, Change: -3.23, Percent Change: -0.85