Shares of Harley-Davidson (HOG) are up 35 cents, or 1%, at $30.56, but Baird & Co. analyst Craig Kennison writes in a note this afternoon that his checks with dealerships reveal that “retail is tracking toward the low end of expectations” for bike sales.
Kennison maintains an “Outperform” rating on the stock and a $42 price target.
Specifically, it looks as if dealers will sell 44,000 to 46,000 bikes in the U.S. in Q2, which is an 18% year-over-year decline. That’s better than the 24% decline in Q1, but “softer” than he’d expected.
Prices, however, are holding strong, a positive sign, for both new and used bikes.
And while Harley has one-quarter of its exposer to the Euro hedged, “it is not clear that near-term consensus reflects potential downward pressure from trends there.”
And then, in a qualification of the buy rating, Kennison writes that he’s still bullish “around $30,” even though he acknowledges the desire to harvest gains in the stock.
Harley shares are up 22% this year.
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