Baird analysts predict sluggish short term for Harley, but bright prospects in future

The sales outlook for Harley-Davidson motorcycles is likely to remain relative slow for the near term, according to a research report released by Robert W. Baird & Co. analysts on Friday.

Domestic dealers are expected to sell 44,000 to 46,000 motorcycles during the second quarter, a slight decrease from analysts’ previous prediction. While inventories at dealerships have fallen to reflect the lower demand, sales of used motorcycles have increased, the report states.

As seasonal demand has increased the appetite for bikes, inventories have fallen, which has helped increase average sales price. Because dealers are reporting thin inventories, the company’s production cuts appear to be working, the report states.

Harley’s long-term prospects remain bright, Baird analysts believe, because it still controls roughly half of the American motorcycle market.

“We remain bullish near $30 (per share), noting a compelling turnaround story, higher bike prices, bottoming retail trends, an inventory bullwhip as dealers replenish inventory and the potential to rethink HDFS (Harley-Davidson Financial Services),” the report states.


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