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Longbow's Dealer Checks Suggest Harley-Davidson Sales Down 1-3% In May

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Longbow's Dealer Checks Suggest Harley-Davidson Sales Down 1-3% In May

May dealer checks indicate that Harley-Davidson Inc (NYSE: HOG) may have witnessed a percent decline in retail sales, despite increased credit availability, Longbow's David S MacGregor said in a report. He reiterated a Neutral rating for the company, citing ongoing market share losses due to increased competition on pricing and financing promotions and new models launched by competitors.

The May US dealer survey revealed new bikes declined 1-3 percent, while inventories rose 1-2 percent, analyst David MacGregor mentioned. Moreover, Harley-Davidson increased promotional activity during the month, offering new financing promotions from HDFS to lower tiers of credit.

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“Weakness in the Touring, Cruiser and Sportster categories for HOG raises the possibility that PII (Indian – Cruiser-intensive product line-up with new Touring models) was successful in taking market share during May,” MacGregor wrote.

Shares To Remain Range Bound

While expressing concern regarding market share losses resulting from increased competition, the analyst also mentioned that Harley-Davidson was facing growing pressure from the used bike market. He expects 2016 to be a transitional year for the company, as it invests in its marketing organization, which “should result in a more rider-centric 2017 product development program.”

Although the shares do not have significant downside, they may remain range-bound into early 2017, MacGregor commented.

Latest Ratings for HOG

DateFirmActionFromTo
Nov 2020UBSDowngradesBuyNeutral
Oct 2020BMO CapitalMaintainsOutperform
Oct 2020StifelMaintainsHold

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