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Jefferies stepped away from its previously bearish rating on Harley-Davidson (NYSE:HOG) as a double-digit drop in recent days has balanced the risk/reward.
The team, led by Randal Konik and Anna Glaessgen, indicated that the stock’s nearly 14% drop in the past week has placed it at the $39 price target the team assigned in November 2022. As such, a Sell-equivalent rating is no longer appropriate.
“Our view on fundamentals is unchanged; we remain cautious on retail demand stabilization amid a shaky macro backdrop and risks stemming from HDFS (credit losses, rising rates),” the team explained. “The early inroads of the Hardwire strategy will be tested by a less favorable
backdrop over the next 6-18 months (COVID unwind + macro); bulls overlook the execution risk of extending beyond the core.”
A downside price target of $21 was maintained, with the team noting that a retail inflection failing to materialize could move shares markedly lower. The analysts indicated that Fox Factory Holding Corp. (FOXF) and Brunswick Corporation (BC) are preferable names in the powersports.
Shares of Harley-Davidson (HOG) rose modestly in premarket trading on Wednesday.
Read more on the company’s most recent earnings result.