Home Depot (HD) could see slightly better sales growth as demand holds up, but higher fuel, energy and product costs and weak demand for large home projects may limit earnings growth, RBC Capital Markets said in a note emailed Wednesday.

RBC raised its Q3 comparable sales forecast to 2.4% from 1.7%, while cutting its adjusted earnings estimate to $3.78 per share from $3.97, according to the note.

Demand from professional customers, continued market-share gains at SRS, and strong business in Canada and Mexico could support sales, while smaller repair and maintenance projects remain active, RBC said.

Unexpected cost pressure from fuel, energy and product inputs is expected to offset the benefit from tariff refunds during the rest of the year, while housing affordability concerns and very low home turnover are likely to remain a drag on larger home improvement projects, the investment firm said.

RBC kept its sector perform rating and lowered its price target for Home Depot to $342 from $343, saying H2 comparable sales are expected to improve slightly from H1.

Price: 348.30, Change: +10.81, Percent Change: +3.20