Goldman Sachs analyst David Tamberrino downgraded Harley-Davidson (HOG) to Sell from Neutral and lowered his price target for the shares to $34 from $37.
The stock closed yesterday down 78c to $38.92.
The analyst views Harley as the "worst positioned" within his Powersports coverage given its concentration in a "secularly declining" motorcycle market. The company needs to grow its customer-base through rider academies as well as incremental marketing spend, Tamberrino tells investors in a research note. Further, Harley-Davidson's new product introductions into more crowded markets will likely lower its margins. While Harley's move into smaller bikes and electrification has longer-term benefits, the strategy could hurt profitability given the requirements for incremental spend, says the analyst. Lastly, Tamberrino sees risk to Harley-Davidson Financial Services as interest rates rise.
The analyst this morning also initiated coverage of Polaris Industries (PII) with a Buy rating and BRP Inc. (DOOO) with a Neutral rating.
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