On Friday, Citi updated its outlook on Harley-Davidson shares, increasing the price target to $37 from $35, while keeping a Neutral rating on the stock. The adjustment comes in the wake of the company's revised guidance post its second-quarter performance, a move that aligns with trends seen across the powersports industry.
Harley-Davidson announced a cut in its guidance following the second quarter, a decision that did not come as a surprise given similar actions by peer companies. However, Harley-Davidson's retail guidance stands out. The firm expects a significant acceleration in the second half of the year, a contrast to the patterns observed in other sectors.
Citi's revised figures reflect a cautious recognition of Harley-Davidson's outlook and channel dynamics. Despite the company's positive retail predictions, the analyst expressed concerns about the reliability of Harley-Davidson's optimistic forecast for 2024, noting investor apprehension regarding the de-risking of the company's future narrative was a key focus during this earnings season.
In other recent news, Harley-Davidson Inc (NYSE:HOG). reported a second-quarter profit surpassing Wall Street expectations, primarily due to robust sales of its high-end Touring motorcycles. Despite market challenges, the company's strategic focus on wealthier clientele helped bolster profit margins. However, Harley-Davidson revised its revenue outlook for 2024, indicating a potential downturn in demand, and plans to make more significant production cuts later this year.
The company also announced plans to repurchase $1 billion of its own stock by 2026, a move that has caught investors' attention. Harley-Davidson's retail motorcycle sales in the second quarter dipped by 3%, mostly due to weaker performance in China.
In analyst news, Citi adjusted the price target for Harley-Davidson shares, citing concerns about weaker-than-expected retail performance and excess inventory. Meanwhile, the Biden administration announced nearly $1.1 billion in grants for electric vehicle production, with Harley-Davidson set to receive $89 million to expand its Pennsylvania plant for manufacturing electric motorcycles.
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