Wedbush Downgrades Harley-Davidson On 'Underwhelming' April/May Demand

In a report published Thursday, Wedbush analyst James Hardiman downgraded the rating on

from Outperform to Neutral, while lowering the price target from $74 to $57. April/May checks indicate that the improvement in demand was "underwhelming," despite improved weather and the Road Glide re-introduction. "The first week of June was somewhat better, but we fear this may be too little/too late to achieve our 2Q projection," Hardiman said, while adding June growth would likely be below expectations. According to the analyst, there appear to have significant declines in demand in the low-to-mid price points, possibly driven by a "stale" product offering, increased promotional activity from competitors in Europe and Japan, more or better offering from competitors, lower than expected demand for the new Street bike and a "fundamentally less healthy" customer base in these segments. The retail growth estimate for FY2015 has been reduced from close to 4 percent to 2 percent, below the consensus projection of 3 percent. The FY2015 retail registrations and shipment estimates have accordingly been lowered and now stand below the guidance for the full year. The 2015 and 2016 EPS estimates have also been reduced.