Home Depot (HD) is "moving fast" to diversify sourcing as it currently sources around 50% of its products globally, but it expects no single region outside of the US to account for more than 10% of its purchases over the next year, RBC Capital said in a Tuesday note.

The company's management view on consumer pricing will likely "limit flow" although the forward comp trajectory looks "better," RBC analysts said.

The retailer intends to retain its pricing throughout its portfolio despite incremental costs from tariffs, the analysts said, adding that the decision could weigh on H2 margins.

In fiscal Q1, big ticket comp sales "remained positive" and rose 0.3%, which will be "important to watch to understand whether the growth was driven by pull-forward or was perhaps representative of some stability," according to the note.

RBC maintained Home Depot's rating at sector perform with a $399 price target.

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