UBS analysts reiterated their Neutral rating and a $40 price target on Harley-Davidson (NYSE:HOG), highlighting concerns over potential shipment guidance cuts for the rest of the year.
According to the analysts, recent dealer feedback suggests Harley-Davidson may need to further reduce its shipment forecast due to worsening trends in the September quarter. July’s performance was buoyed by favorable year-over-year comparisons from prior production disruptions, but performance has weakened across the subsequent months.
There had been dealer speculation about Harley shipping 2025 models early, in calendar 2024, to bolster shipments, but the company has confirmed it will adhere to its traditional model year schedule, launching in early 2025. Following a modest 2.5-point guidance cut in Q2, the analysts suggest another reduction could be forthcoming. Reports from several dealers indicate they have received no new bike deliveries in recent weeks and don’t anticipate additional inventory through the year’s end, signaling a potential halt in shipments earlier than usual.
Harley-Davidson aims to keep dealer inventory flat year-over-year by the end of Q4, yet analysts question if this target is optimal. A flat inventory level would be 14% below pre-pandemic stock levels, even as retail sales have dropped by a cumulative 25% since then.