+ 2.69
+ 1.88%

Harley-Davidson Stock Could Hit Some Speed Bumps, Gets Dowgrade

April 23, 2021 11:23 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Harley-Davidson Stock Could Hit Some Speed Bumps, Gets Dowgrade

Following Harley-Davidson Inc’s (NYSE:HOG) strong first-quarter earnings, investors have become bullish on the company’s potential turnaround and seem to be under-estimating the secular challenges ahead, according to Morgan Stanley.

The Harley-Davidson Analyst: Billy Kovanis downgraded the rating for Harley-Davidson from Equal-Weight to Underweight, while raising the price target from $36 to $38.

The Harley-Davidson Thesis: Following strong first-quarter results, the stock has risen to a three-year high, sufficiently reflecting the “positive dynamics,” Kovanis said in the downgrade note.

“While investors have justifiably embraced the new message from CEO Jochen Zeitz around increasing desirability and profitability, there are now higher expectations to execute beyond the 'quick fixes' that management has successfully implemented,” he added.

It seems to be “too early for investors to extrapolate one quarter into their 10yr DCF at this stage, particularly as Q1 included one-off tailwinds,” the analyst noted.

“Overall, amidst the positive sentiment and turnaround actions implemented, we don't believe investors are focused on the potential headwinds that are around the corner, stemming from electrification, new competition, a potential 200bps impact from higher EU tariffs and an industry in secular decline,” Kovanis wrote.

HOG Price Action: Shares of Harley-Davidson had declined by 0.71% to $47.73 at the time of publication Friday morning.

(Photo: Almani via Unsplash)

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

Harley-Davidson Beats Low Q1 Expectations, But Analyst Says US Retail Environment Challenging

Morgan Stanley: Harley-Davidson Has Better Odds In SUVs Than Electric Bikes

Harley Rolls Out Ho-Hum New Lineup; Death Of The V-Rod

Boomers Or Bust? Bernstein Downgrades Harley-Davidson As 'Potential Upside Is Now In The Rear View'